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Productivity, congested commuting, and metro size

Author

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  • Jordan Rappaport

Abstract

The monocentric city model is generalized to a fully structural form with leisure in utility, congested commuting, and the equalizing of utility and perimeter land price across metros. Exogenous and agglomerative differences in total factor productivity (TFP) drive differences in metro population, radius, land use, commute time, and home prices. Quantitative results approximate observed correspondences among these outcomes across U.S. metros. Traffic congestion proves the critical force constraining population. Self-driving cars significantly increase the sensitivity of metro population to productivity. Population becomes less responsive to increases in productivity as metros become larger. Correspondingly, the productivity ?cost? of metro population?the TFP required to support a given population?increases convexly with size. Benchmark estimates suggest that agglomerative productivity suffices to support increases in population from low levels, allowing chance to play a significant role in determining which locations with sufficient exogenous TFP develop into small metros. But agglomerative productivity falls considerably short of supporting increases in population from high levels, suggesting that large metros arise from strong ?fundamentals? such as high exogenous TFP.

Suggested Citation

  • Jordan Rappaport, 2016. "Productivity, congested commuting, and metro size," Research Working Paper RWP 16-3, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkrw:rwp16-03
    DOI: 10.18651/RWP2016-03
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    File URL: https://www.kansascityfed.org/documents/4183/Productivity_Congesting_Commuting_and_Metro_Size.pdf
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    Cited by:

    1. Gilles Duranton & Jessie Handbury, 2023. "COVID and Cities, Thus Far," Economic Policy Review, Federal Reserve Bank of New York, vol. 29(2), pages 6-52, October.
    2. Larson, William & Zhao, Weihua, 2020. "Self-driving cars and the city: Effects on sprawl, energy consumption, and housing affordability," Regional Science and Urban Economics, Elsevier, vol. 81(C).

    More about this item

    Keywords

    City size; Commuting; Congestion; Land use; Metropolitan size; Self-driving cards; Time use;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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