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Population Structures in Russia: Optimality and Dependence on Parameters of Global Evolution

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  • Yuri Yegorov

Abstract

The paper is devoted to analytical investigation of the division of geographical space into urban and rural areas with application to Russia. Yegorov (2005, 2006, 2009) has suggested the role of population density on economics. A city has an attractive potential based on scale economies. The optimal city size depends on the balance between its attractive potential and the cost of living that can be proxied by equilibrium land rent and commuting cost. For moderate scale effects optimal population of a city depends negatively on transport costs that are related positively with energy price index. The optimal agricultural density of population can also be constructed. The larger is a land slot per peasant, the higher will be the output from one unit of his labour force applied to this slot. But at the same time, larger farm size results in increase of energy costs, related to land development, collecting the crop and bringing it to the market. In the last 10 years we have observed substantial rise of both food and energy prices at the world stock markets. However, the income of farmers did not grow as fast as food price index. This can shift optimal rural population density to lower level, causing migration to cities (and we observe this tendency globally). Any change in those prices results in suboptimality of existing spatial structures. If changes are slow, the optimal infrastructure can be adjusted by simple migration. If the shocks are high, adaptation may be impossible and shock will persist. This took place in early 1990es in the former USSR, where after transition to world price for oil in domestic markets existing spatial infrastructure became suboptimal and resulted in persistent crisis, leading to deterioration of both industry and agriculture. Russia is the largest country but this is also its problem. Having large resource endowment per capita, it is problematic to build sufficient infrastructure. Russia has too low population density and rural density declines further due to low fertility and migration to cities. Those factors limited the growth of the USSR, but after the economic reforms of 1990s the existing infrastructure became exposed to permanent shock of high transport costs. Due to large distances it is optimal to return to gasoline and thus transport subsidy. This will work also against disintegration of the country.

Suggested Citation

  • Yuri Yegorov, 2014. "Population Structures in Russia: Optimality and Dependence on Parameters of Global Evolution," ERSA conference papers ersa14p38, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa14p38
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    References listed on IDEAS

    as
    1. Yuri Yegorov, 2006. "Emergence and Evolution of Heterogeneous Spatial Patterns," ERSA conference papers ersa06p690, European Regional Science Association.
    2. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827.
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    More about this item

    Keywords

    urban; rural; population density; prices; transport; transition.;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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