by Levi Russell
I came across this blog post late last week and thought I'd share it. In the post, the author (a geographer) presents the typical case that city density is positively correlated with productivity. This is thought to be due to "agglomeration externalities" which are "the benefits that firms obtain by locating near each other."
The author presents some statistics showing a positive correlation between productivity and city size or density. Part of the problem of establishing a causal link between density and productivity is that once you dig into the data to figure out exactly who gets more productive in denser places, it tends to be only people who are highly skilled with "nonroutineized work." His second critique is that we don't know how density drives productivity. He gives this task to economists.
He then mentions some policy problems and alludes to an issue I've often thought about when taking courses on urban and regional economics. Do we need to reign in urban sprawl? If density doesn't actually drive productivity, is sprawl really that bad? What about technology that allows a lot of people to telecommute effectively?
I found the post thought-provoking and it has some interesting data. Let me know what you think!
Interesting concepts, I do wonder if magnitude of "agglomeration externalities" has decreased significantly over the past 100-ish years, especially those less dependent on actual spatial effects (interactions via internet versus actual transpo costs).
ReplyDeleteNo doubt. I made this observation in my undergrad and grad urban/regional courses. Response I got from my prof was basically "drop it."
DeleteFun stuff! There are, of course, both economies and dis-economies of scale (and to a lesser extent scope). So urbanization economies should have diminishing marginal returns. At the same time, urban hierarchy, changing technology, and industry life cycles tend to keep high productivity (think expensive) goods and services clustered in cities, which certainly has an effect on size and productivity graph. And transportation adds fascinating layers to peel back. Would love to see more research on this!
ReplyDeleteDo you have any thoughts on his comment that some "sprawl" is very dense? I think of Houston when I read that.
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