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The Effect of Information and Communication Technologies on Urban Structure

  • Yannis M. Ioannides
  • Henry G. Overman
  • Esteban Rossi-Hansberg
  • Kurt Schmidheiny

Two innovations in the last century have changed dramatically the cost of communicating and transmitting information: The first is the widespread adoption of telephony; the second is the internet. We study the implications of these changes in ICT for urban structure. We find robust evidence that increases in the number of telephone lines per capita lead to a more concentrated distribution of city sizes and so correspondingly to more dispersion in the distribution of economic activity in space. The evidence on internet usage is more speculative, although it goes in the same direction. This empirical result is rationalized in a theoretical model.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2007/wp-cesifo-2007-07/cesifo1_wp2049.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2049.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2049
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  1. Esteban Rossi-Hansberg & Mark L. J. Wright, 2007. "Urban Structure and Growth," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 597-624.
  2. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  3. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
  4. Ades, Alberto F & Glaeser, Edward L, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 195-227, February.
  5. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, vol. 73(1), pages 85-105, July.
  6. Diego Comin & Bart Hobijn, 2003. "Cross-country technology adoption: making the theories face the facts," Staff Reports 169, Federal Reserve Bank of New York.
  7. Kwok Tong Soo, 2004. "Zipfs Law for Cities: A Cross Country Investigation," CEP Discussion Papers dp0641, Centre for Economic Performance, LSE.
  8. Rosen, Kenneth T. & Resnick, Mitchel, 1980. "The size distribution of cities: An examination of the Pareto law and primacy," Journal of Urban Economics, Elsevier, vol. 8(2), pages 165-186, September.
  9. J.V. Henderson, 1972. "The Sizes and Types of Cities," Working Papers 75, Queen's University, Department of Economics.
  10. Henderson, Vernon, 1997. "Medium size cities," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 583-612, November.
  11. Xavier Gabaix & Rustam Ibragimov, 2006. "Log(Rank-1/2): A Simple Way to Improve the OLS Estimation of Tail Exponents," Harvard Institute of Economic Research Working Papers 2106, Harvard - Institute of Economic Research.
  12. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
  13. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
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