Measuring Urban Economic Density
Agglomeration economies are at the heart of urban economics, driving the existence and extent of cities and are central to structural transformation and the urbanization process. This paper evaluates the use of different measures of economic densit...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/180351545079578387/Measuring-Urban-Economic-Density http://hdl.handle.net/10986/31080 |
| Summary: | Agglomeration economies are at the heart
of urban economics, driving the existence and extent of
cities and are central to structural transformation and the
urbanization process. This paper evaluates the use of
different measures of economic density in assessing urban
agglomeration effects, by examining how well they explain
household income differences across cities and neighborhoods
in six African countries. The paper examines simple scale
and density measures and more nuanced ones that capture the
extent of clustering within cities. The evidence suggests
that more nuanced measures attempting to capture within-city
differences in the extent of clustering do no better than a
simple density measure in explaining income differences
across cities, at least for the current degree of accuracy
in measuring clustering. However, simple city scale
measures, such as total population, are inferior to density
measures and to some degree misleading. The analysis finds
large household income premiums from being in bigger and
particularly denser cities over rural areas in Africa,
indicating that migration pull forces remain very strong in
the structural transformation process. Moreover, the
marginal effects of increases in urban density on household
income are very large, with density elasticities of 0.6. In
addition to strong city-level density effects, the analysis
finds strong neighborhood effects. For household incomes,
overall city density and density of the neighborhood matter. |
|---|