Geography, history, economies of density, and the location of cities
Abstract: Economists believe that people choose to live and work at sites that have productive or amenity value such as a river, harbor, or some other natural resource. Another factor that may determine the location of a city is the benefits derived from density itself: agglomeration economies. Although these complementary explanations both have something useful to say about the locations and sizes of cities, they also have important limitations. While natural features seem important, it is difficult to point to one or even several that are valuable enough to explain a very large metropolitan area. And if there are large economies of density, then any location could be the potential site for a city, since density itself provides a reason for further concentration. If you were to replay the settlement of some large expanse of land, perhaps cities in this alternative history would be of different sizes and locations. This ?path dependence? or ?history dependence? is a potentially important theoretical implication of models featuring economies of density. In this article, Jeff Lin helps shed light on why cities are located where they are.
Provider: Federal Reserve Bank of Philadelphia
Part of Series: Business Review
Publication Date: 2012