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Agglomeration Economics$
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Edward L. Glaeser

Print publication date: 2010

Print ISBN-13: 9780226297897

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226297927.001.0001

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New Evidence on Trends in the Cost of Urban Agglomeration

New Evidence on Trends in the Cost of Urban Agglomeration

(p.339) 11 New Evidence on Trends in the Cost of Urban Agglomeration
Agglomeration Economics
Matthew E. Kahn
University of Chicago Press

Congestion, pollution, and crime represent three important factors that discourage urban agglomeration. This chapter examines how the population elasticity of producing local public bads such as crime, pollution, and commute times has changed over time and how it varies across U.S. census regions. It shows significant geographical variation in the relationship between ambient air pollution and population size, and between crime and population size, using a production function approach to estimate how city size is associated with local public bads at different points in time and across U.S. regions. The results complement a recently revealed preference literature that has used cross-city hedonic approaches to infer city quality of life. A hedonic approach that solely focuses on conducting a separable decomposition by teasing out each of these effects individually is likely to underestimate the overall impact of these factors on urban quality of life. The net effect of crime and pollution reductions is stronger cities. This reduction in the cost of “city bigness” means that cities can grow and enjoy the beneficial effects of agglomeration.

Keywords:   urban agglomeration, pollution, population size, congestion, U.S. census regions

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