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The Geographical Origins of the Wealth of Regions

Author

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  • Cermeño, Alexandra L.
  • Salvo, Carla
  • Weisdorf, Jacob

Abstract

Why are some regions rich and others poor? This study investigates the geographical origins of Italy’s persistent regional income gap. Using municipal population density as both a proxy for historical income and an outcome shaped by geography, we show that first-nature advantages, such as mild climates and fertile soils, favoured higher population density in Northern Italy from the earliest available data. Second-nature forces (agglomeration and market connectivity) then reinforced this initial lead. We find that first- and second-nature geography jointly explain half of today’s municipal variation in income per capita, whereas pre-unification regional histories account for only about one-fifth.

Suggested Citation

  • Cermeño, Alexandra L. & Salvo, Carla & Weisdorf, Jacob, 2025. "The Geographical Origins of the Wealth of Regions," CEPR Discussion Papers 20919, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20919
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    File URL: https://cepr.org/publications/DP20919
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    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative

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