TY - JOUR
T1 - The optimal distribution of population across cities
AU - Albouy, David
AU - Behrens, Kristian
AU - Robert-Nicoud, Frédéric
AU - Seegert, Nathan
N1 - Publisher Copyright:
© 2018 Elsevier Inc.
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 2019/3
Y1 - 2019/3
N2 - We develop an urban model that incorporates: (1) heterogeneous sites; (2) fiscal and urban externalities; and (3) an endogenous number of cities, i.e., the extensive margin of urban development. Within- and across-city decreasing returns to scale cause agents to perceive their city as being too large in the socially optimal allocation. As a consequence, in equilibrium the largest cities on the most amenable sites are undersized, whereas the smaller cities on less amenable sites are oversized. We propose a test for optimal city size with heterogeneous sites extending the Henry George Theorem.
AB - We develop an urban model that incorporates: (1) heterogeneous sites; (2) fiscal and urban externalities; and (3) an endogenous number of cities, i.e., the extensive margin of urban development. Within- and across-city decreasing returns to scale cause agents to perceive their city as being too large in the socially optimal allocation. As a consequence, in equilibrium the largest cities on the most amenable sites are undersized, whereas the smaller cities on less amenable sites are oversized. We propose a test for optimal city size with heterogeneous sites extending the Henry George Theorem.
KW - Fiscal wedges
KW - Henry George Theorem
KW - Local governments
KW - Optimal and equilibrium city sizes
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U2 - 10.1016/j.jue.2018.08.004
DO - 10.1016/j.jue.2018.08.004
M3 - Article
AN - SCOPUS:85061709183
VL - 110
SP - 102
EP - 113
JO - Journal of Urban Economics
JF - Journal of Urban Economics
SN - 0094-1190
ER -