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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)

  • Laurent Gobillon


    (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - 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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  1. Diego Puga, 2010. "The Magnitude And Causes Of Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 203-219.
  2. Paul Cheshire & Stefano Magrini, 2005. "Population Growth in European Cities - Weather Matters, but only Nationally," ERSA conference papers ersa05p12, European Regional Science Association.
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  7. Thomas, Vinod, 1980. "Spatial differences in the cost of living," Journal of Urban Economics, Elsevier, vol. 8(1), pages 108-122, July.
  8. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
  9. Gilles Duranton, 2008. "Viewpoint: From cities to productivity and growth in developing countries," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 689-736, August.
  10. Pierre-Philippe COMBES & Gilles DURANTON & Laurent GOBILLON, 2010. "The Identification of Agglomeration Economies," Working Papers 2010-52, Centre de Recherche en Economie et Statistique.
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  13. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent & Roux, Sébastien, 2008. "Estimating Agglomeration Economies with History, Geology, and Worker Effects," CEPR Discussion Papers 6728, C.E.P.R. Discussion Papers.
  14. Davis, Morris & Heathcote, Jonathan, 2001. "Housing and the Business Cycle," Working Papers 01-09, Duke University, Department of Economics.
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  22. Jessie Handbury & David E. Weinstein, 2011. "Goods Prices and Availability in Cities," NBER Working Papers 17067, National Bureau of Economic Research, Inc.
  23. Duranton, Gilles, 2008. "From Cities to Productivity and Growth in Developing Countries," CEPR Discussion Papers 6634, C.E.P.R. Discussion Papers.
  24. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
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