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The Costs of Agglomeration: Land Prices in French Cities

  • Pierre-Philippe Combes


    (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales)

  • Gilles Duranton


    (Wharton School, University of Pennsylvania - University of Pennsylvania [Philadelphia])

  • Laurent Gobillon


    (INED - Institut national d'études démographiques, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)

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.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00793632.

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Date of creation: Nov 2012
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Handle: RePEc:hal:psewpa:halshs-00793632
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