Some Evidence on the Nature of Urbanization Economies
Urbanization economies – the effects on productivity and utility created endogenously by larger cities – are a fundamental component of both the economic geography of modern societies and the perpetuation of innovation and economic growth at a national level. Cities account for vast majorities of population – and even larger proportions of production and innovation – in all advanced economies. The nature of these endogenous effects of city size is thus of considerable importance. Krupka (2008) presents a general model in which exogenous variation in local productivity ("natural advantage") and development constraints generate covariation in local incomes, housing prices and population. In that model, the strength of the correlation amongst these variables depends on the nature of the dominant urbanization economy (or diseconomy). This paper looks at the data over the last several decades and finds that the data is consistent with city size increasing consumer/resident happiness and/or reducing productivity of employers.
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References listed on IDEAS
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- Rappaport, Jordan, 2008.
"A productivity model of city crowdedness,"
Journal of Urban Economics,
Elsevier, vol. 63(2), pages 715-722, March.
- Jordan Rappaport, 2006. "A productivity model of city crowdedness," Research Working Paper RWP 06-06, Federal Reserve Bank of Kansas City.
- Krupka, Douglas J., 2008. "On Amenities, Natural Advantage and Agglomeration," IZA Discussion Papers 3598, Institute for the Study of Labor (IZA).
- Alberto Dalmazzo & Guido de Blasio, 2011. "Amenities and skill‐biased agglomeration effects: Some results on Italian cities," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 503-527, 08.
- Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
- Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc.
- Duranton, Gilles & Puga, Diego, 2003. "Microfoundations of Urban Agglomeration Economies," CEPR Discussion Papers 4062, C.E.P.R. Discussion Papers.
- Rappaport, Jordan, 2008. "Consumption amenities and city population density," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 533-552, November. Full references (including those not matched with items on IDEAS)
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