Urban Diversity and Economic Growth
1. Why Cities Exist Brueckner: Ch. 1 Quigley, John M. (1998) “Urban Diversity and Economic Growth.” The Journal of Economic Perspectives 127 - 138
2. City Size McCann: Ch. 3 Glaeser, Edward L. (2005) “Urban Colossus: Why is New York America’s Largest City?” Harvard Discussion Paper 2073 Au, Chun-Chung, and J. Vernon Henderson. (2006) "Are Chinese cities too small?" The Review of Economic Studies 73(3): 549-576.
3. Urban and Regional Growth McCann: Ch. 5 Henderson, J. Vernon, Adam Storeygard, and David N. Weil. (2012)"Measuring economic growth from outer space." American Economic Review 102(2): 994-1028. Kline, Patrick, and Enrico Moretti. (2014) "Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority." The Quarterly Journal of Economics 129(1): 275-331. Alesina, A. and E. LaFerrara (2005) “Ethnic Diversity and Economic Performance.” Journal of Economic Literature 43(3): 762-800
4. Household Location Decisions Brueckner: Ch. 6 DiPasquale, Denise, and Edward L. Glaeser. (1999) "Incentives and social capital: are homeowners better citizens?" Journal of Urban Economics 45(2): 354-384. Rossi-Hansberg, Sarte and Owens, “Housing Externalities.” Journal of Political Economy
5. Highways and Transit Brueckner: Ch. 5 Baum-Snow, Nathaniel. "Did highways cause suburbanization?" The Quarterly Journal of Economics (2007): 775-805. Duranton, Gilles, and Matthew A. Turner. "The fundamental law of road congestion: Evidence from US cities." The American Economic Review (2011): 2616-2652.
6. Local Economic Development Policy Deller and Goetz (2009) “A Brief History of Economic Development Policy and Thought.” In Goetz, Deller and Harris (eds) Targeting Regional Economic Development. Bartik (2005) “Solving the Problems of Economic Development Incentives” Growth and Change. 36(2):139-166
7. Urban Quality-of-Life Brueckner: Ch. 11 Rappaport (2007) “Moving to Nice Weather.” Regional Science and Urban Economics. Roback, J. (1985) “Wages, Rents and Quality of Life” Journal of Political Economy 90(6): 1257-1278
8. Urbanization in the Global South Goldman, Michael (2015) “Development and the City.” in Cities of the Global South Reader eds. Miraftab, Faranak and Neema Kudva Routledge Press Robinson, Jennifer (2015) “World Cities, or a World of Ordinary Cities?.” in Cities of the Global South Reader eds. Miraftab, Faranak and Neema Kudva Routledge Press.
Choose 5 from the above 8 topics to write.
"During the second week of class you must sign up to critically evaluate 5 readings
over the course of the semester. These should be no more than 2 pages double spaced"
Kind of like writing about your reflections on these.
Urban Economics
Author
Affiliation
Course
Instructor
Due Date
Why Cities Exist
Urban diversity and economic growth.
Upon examining the ‘Urban Diversity and Economic Growth by John M. Quigley, quite informative insights were observed. I agree that traditionally cities have emerged to have a concentrated population at the Central Business District. Therefore, human capital factors of production are concentrated at the center in order to maintain the cost of transportation and flow of information at low levels. Additionally, land at the CBD is at the highest values because of the immediate availability of the factors of production. As we drift away from the city CBD the cost of housing and land prices begin to decline. The city outskirts have big land sizes, longer commute times, and poverty levels decrease.
The model above is closely supported by Jan K. Brueckner's theories in “Why Cities Exist ."Brueckner is convincing that cities exist due to two main forces; scale economies and agglomeration economies. Social economies arise when business becomes more efficient to a large scale of operation and can produce more output per unit of input. As a result, workers are more willing to locate near the businesses, resulting in "company towns ."With the increased settlement, the 'company towns' will require more auxiliary services such as hospitals, shopping centers, and banking.
On the other hand, agglomerate economies have monetary effects on transport costs. Savings arise when markets and suppliers are closely located to each other. Similarly, employees tend to benefit from each other through co-working and interactions with other employees from different companies. Hence, knowledge transfer becomes easy and beneficial to companies in the vicinity.
However, the traditional view of urban areas has been challenged by decentralization. New York is still one of the few cities with a concentrated urban population. More cities have become decentralized; for instance, Los Angeles and Chicago have most employment opportunities located away from the CBD. Many workers are relocating to the suburbs forcing companies to relocate to residential areas.
Furthermore, the suburbs offer better access routes for transportation. As a result, companies are relocating suburbs where they can be closer to their workers and have less congested routes for transportation. Besides, manufacturing companies needs more space for operations that can only be found in the suburbs. Thus, the classical empirical evidence about urban economies may no longer be valid.
City Size
Why is New York America’s Largest City
Edward L. Glaeser demonstrates a deeper understanding of the growth of New York City and makes strong points on why it is America’s largest city. I agree with most of his arguments as they draw parallels with other big cities worldwide. First, as mentioned earlier, agglomeration economics play a huge role in the growth of urban areas. New York is no different; its geographical location made it an ideal place for a strategic harbor that led to the development of the biggest port in America. Agglomeration economies resulting from large-scale economies from the shipping industry coupled with specialization fuelled New York’s profound growth.
Secondly, most cities are more likely to develop where production costs are low. New York's transportation cost was cheaper due to well-developed port services. As a result, it could attract other industries, for instance, sugar refineries in the area. Although manufacturing companies no longer value transportation costs as a source of competitive advantage, it is still crucial for other business services. Therefore, explaining New York's meteoric growth.
Thirdly, the localization of economies led to the development of 'economic niches' that depended on one another. Agglomeration economies became the backbone of New York by further attracting immigrants that encouraged technological transfer and lowering transportation costs. The resulting cultural diversity formed a strong mesh for the continued interdependence of 'small pockets' of economies, thus increasing economic activities in the area. Today, New York still owes its growth to immigrants and tourists who continue to trickle in.
Are Chinese cities too small?
Chun-Chung and J. Vernon Henderson make bold claims about Chinese cities in their publication "Are Chinese cities too small?". The publication suggests that the cost of inefficiently small Chinese cities is high, and thus the cost of an undersized city is more than the cost of being oversized. Considering that this is China, where the government has a firm grip on every economic sector, the study is likely untrue that Chinese cities are undersized.
I believe Chinese cities are not small as the study depicts. The Chinese government is sometimes keen on manipulating data on city sizes because of the understanding that concentrating economic activities in certain areas translates to maximized benefits from agglomeration economics. Thus, a study that small Chinese cities create an incentive to enact policies that modify city sizes. Furthermore, the majority of research on China measures cities by the number of individuals who have ‘hukou’ household registration for that location, rather than by the number of people who live there. As a result, it may provide misleading information on the city's actual size.
Going by the census data, Chinese cities inefficiently small have attained a productivity-maximizing scale. Chinese residents not captured in the "hokou” household registration system seem to provide economic support that closely matches productivity maximization.
Household Location
Household Location Decisions