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One or infinite optimal city sizes? In search of an equilibrium size for cities

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  • Roberto Camagni
  • Roberta Capello
  • Andrea Caragliu

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Abstract

In this paper, the stylized assumption that one single “optimal” city size exists for all cities—achieved when marginal location costs equal marginal location benefits—is abandoned, as well as the opposite view that each city operates on its own cost and production curves, defining a specific optimal size. Instead, this work maintains the comparability among cities and demonstrates that urban specificities in functions performed, quality of life, industrial diversity and social conflicts shift up and down the benefits and costs linked to pure physical size, leading to different “equilibrium” sizes for cities. In order to achieve this result, a model of equilibrium urban size is set up, based on urban costs and urban benefits, merging elements suggested both by the traditional urban economics literature as well as by updated approaches considering also environmental quality, urban form and inter-urban cooperation networks. The model is then estimated on a sample of 59 European cities with data at FUA level. Empirical results allow the identification of city-specific “equilibrium” sizes. The error term, that is, the difference between actual urban population and the “equilibrium” one predicted by the model can be explained, beyond a measure of our ignorance, by good or bad governance, thereby suggesting future strategies for more efficient urban planning. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Roberto Camagni & Roberta Capello & Andrea Caragliu, 2013. "One or infinite optimal city sizes? In search of an equilibrium size for cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 309-341, October.
  • Handle: RePEc:spr:anresc:v:51:y:2013:i:2:p:309-341
    DOI: 10.1007/s00168-012-0548-7
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Andrea Caragliu & Camilla Lenzi & Andrea Caragliu, 2013. "Dynamics of knowledge diffusion: the ICT sector in Lombardy," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(4), pages 453-473, November.
    2. Roberto Camagni & Roberta Capello, 2015. "Second-Rank City Dynamics: Theoretical Interpretations Behind Their Growth Potentials," European Planning Studies, Taylor & Francis Journals, vol. 23(6), pages 1041-1053, June.
    3. Susanne A. Frick & Andres Rodriguez-Pose, 2017. "Big or small cities? On city size and economic growth," Papers in Evolutionary Economic Geography (PEEG) 1725, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    4. David Castells-Quintana & Vicente Royuela, 2014. "Agglomeration, inequality and economic growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 343-366, March.
    5. Wenbiao Zhang & Degang Yang & Jinwei Huo, 2016. "Studies of the Relationship between City Size and Urban Benefits in China Based on a Panel Data Model," Sustainability, MDPI, Open Access Journal, vol. 8(6), pages 1-18, June.
    6. Roberto Camagni & Roberta Capello & Andrea Caragliu, 2016. "Crescita urbana e cambiamento strutturale: il ruolo delle economie di agglomerazione dinamiche," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2016(2), pages 15-35.
    7. Castells-Quintana, David, 2017. "Malthus living in a slum: Urban concentration, infrastructure and economic growth," Journal of Urban Economics, Elsevier, vol. 98(C), pages 158-173.
    8. Marin Geshkov, 2015. "Urban Sprawl in Eastern Europe. The Sofia City Example," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 101-116, April.
    9. Berdegué, Julio A. & Carriazo, Fernando & Jara, Benjamín & Modrego, Félix & Soloaga, Isidro, 2015. "Cities, Territories, and Inclusive Growth: Unraveling Urban–Rural Linkages in Chile, Colombia, and Mexico," World Development, Elsevier, vol. 73(C), pages 56-71.

    More about this item

    Keywords

    R11; R12;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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