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The Costs of Agglomeration: Land Prices in French Cities

  • Combes, Pierre-Philippe

    ()

    (GREQAM, University of Aix-Marseille)

  • Duranton, Gilles

    ()

    (University of Toronto)

  • Gobillon, Laurent

    ()

    (INED, France)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7027.

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Length: 47 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:iza:izadps:dp7027
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  1. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2010. "The Identification of Agglomeration Economies," CEPR Discussion Papers 8119, C.E.P.R. Discussion Papers.
  2. Davis, Morris & Heathcote, Jonathan, 2001. "Housing and the Business Cycle," Working Papers 01-09, Duke University, Department of Economics.
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  5. Denise Pumain & France Guérin-Pace, 1990. "150 ans de croissance urbaine," Économie et Statistique, Programme National Persée, vol. 230(1), pages 5-16.
  6. Jordan Rappaport, 2004. "Moving to Nice Weather," Econometric Society 2004 North American Summer Meetings 188, Econometric Society.
  7. David Albouy & Gabriel Ehrlich, 2012. "Metropolitan Land Values and Housing Productivity," NBER Working Papers 18110, National Bureau of Economic Research, Inc.
  8. Richardson, Harry W, 1987. "The Costs of Urbanization: A Four-Country Comparison," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 561-80, April.
  9. Gilles Duranton & Diego Puga, 2001. "From sectoral to functional urban specialisation," LSE Research Online Documents on Economics 20101, London School of Economics and Political Science, LSE Library.
  10. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
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  13. Gerald Carlino, 2009. "Beautiful city," Business Review, Federal Reserve Bank of Philadelphia, issue Q3, pages 10-17.
  14. Duranton, Gilles, 2008. "From Cities to Productivity and Growth in Developing Countries," CEPR Discussion Papers 6634, C.E.P.R. Discussion Papers.
  15. Alan B. Krueger, 2009. "Measuring the Subjective Well-Being of Nations: National Accounts of Time Use and Well-Being," NBER Books, National Bureau of Economic Research, Inc, number krue08-1, August.
  16. 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.
  17. Jessie Handbury & David E. Weinstein, 2011. "Goods Prices and Availability in Cities," NBER Working Papers 17067, National Bureau of Economic Research, Inc.
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  19. Thomas, Vinod, 1980. "Spatial differences in the cost of living," Journal of Urban Economics, Elsevier, vol. 8(1), pages 108-122, July.
  20. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  21. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, June.
  22. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
  23. Morris A. Davis & Michael G. Palumbo, 2006. "The price of residential land in large U.S. cities," Finance and Economics Discussion Series 2006-25, Board of Governors of the Federal Reserve System (U.S.).
  24. Jonathan Heathcote & Morris Davis, 2004. "The Price and Quantity of Residential Land in the United States," 2004 Meeting Papers 32, Society for Economic Dynamics.
  25. Henderson, Vernon, 2002. "Urban primacy, external costs, and quality of life," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 95-106, February.
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