TY - JOUR
T1 - The optimal distribution of population across cities
AU - Albouy, David
AU - Behrens, Kristian
AU - Robert-Nicoud, Frédéric
AU - Seegert, Nathan
N1 - Funding Information:
This paper merges and supersedes Albouy and Seegert (2011) and Behrens and Robert-Nicoud (2015b) . We are grateful to the editor Gilles Duranton, two anonymous referees, and Vernon Henderson for their detailed and extremely valuable comments. We are also grateful to Costas Arkolakis, Richard Arnott, Spencer Banzhaf, Klaus Desmet, Morris Davis, Pablo Fajgelbaum, David Pines, Esteban Rossi-Hansberg, Bernard Salanié, William Strange, Jacques Thisse, Tony Venables, Wouter Vermeulen, Dave Wildasin, and numerous conference and seminar audiences for discussions and feedback. Noah Smith provided preliminary research assistance. Albouy would like to thank the Lincoln Institute for Land Policy for generous assistance on this project. Behrens and Robert-Nicoud gratefully acknowledge financial support from the CRC Program of the Social Sciences and Humanities Research Council (SSHRC) of Canada for the funding of the Canada Research Chair in Regional Impacts of Globalization. This project was funded by the Russian Academic Excellence Project ‘5-100’. The Michigan Center for Local, State, and Urban Policy (CloSUP) provided research funding. Any remaining errors are ours.
Publisher Copyright:
© 2018 Elsevier Inc.
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 -