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The Cost of Agglomeration: Land Prices in Cities

Author

Listed:
  • Pierre-Philippe Combes

    (Département d'économie)

  • Gilles Duranton

    (University of Pennsylvania (Penn))

  • Laurent Gobillon

    (Institut National d'Etudes Démographiques)

Abstract

We develop a new methodology to estimate the elasticity of urban costs with respect to city population using French land price data. Our preferred estimate, which handles a number of estimation concerns, stands at 0.041. Our approach also yields a number of intermediate outputs of independent interest such as a distance gradient for land prices and the elasticity of unit land prices with respect to city population. For the latter, our preferred estimate is 0.72.

Suggested Citation

  • Pierre-Philippe Combes & Gilles Duranton & Laurent Gobillon, 2012. "The Cost of Agglomeration: Land Prices in Cities," Sciences Po publications 9240, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/68snpauh718coq747l6ekv80cd
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    More about this item

    Keywords

    Agglomeration; Land Prices; Land Use and Urban Costs;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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