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The Costs of Agglomeration: Land Prices in French Cities

  • Pierre-Philippe Combes


    (AMU - Aix Marseille Université, CEPR - Center for Economic Policy Research - CEPR)

  • Gilles Duranton


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

  • Laurent Gobillon


    (CEPR - Center for Economic Policy Research - CEPR, 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, INED - Institut national d'études démographiques, IZA - Institute for the Study of Labor - IZA)

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-00849078.

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Date of creation: 30 Jul 2013
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Handle: RePEc:hal:psewpa:halshs-00849078
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  23. Thomas, Vinod, 1980. "Spatial differences in the cost of living," Journal of Urban Economics, Elsevier, vol. 8(1), pages 108-122, July.
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