One or Infinite Optimal City Sizes? In Search of an Equilibrium Size for Cities

Journal title SCIENZE REGIONALI
Author/s Roberto Camagni, Roberta Capello, Andrea Caragliu
Publishing Year 2013 Issue 2013/3
Language Italian Pages 36 P. 53-88 File size 639 KB
DOI 10.3280/SCRE2013-003003
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

In this paper, the stylized assumption that one single ‘optimal’ city size exists for all cities is abandoned, as well as the opposite view that each city operates on its own cost and production curves. A new model of equilibrium urban size is presented, on the basis of urban costs and benefits, and then estimated on a sample of 59 European (FUA) cities. Results demonstrate that urban specificities in functions performed, quality of life, industrial diversity and social conflicts shift up and down the benefits and costs linked to pure physical size, leading to different equilibrium urban sizes. Empirical results allow the identification of city-specific ‘equilibrium’ sizes. The error term is interpreted as a measure of urban governance.

Keywords: Equilibrium city size, urban functions, city networks.

Jel codes: R00, R11

  1. Akçomak I. S., ter Weel B. (2011), The Impact of Social Capital on Crime: Evidence from the Netherlands. Regional Science and Urban Economics, 42, 1: 323-340.
  2. Alonso W. (1960), A Theory of the Urban Land Market. Papers and Proceedings of the Regional Science Association, 6: 149-157.
  3. Alonso W. (1971), The Economics of Urban Size. Papers and Proceedings of the Regional Science Association, 26: 67-83.
  4. Anderson R., Crocker T. (1971), Air Pollution and Residential Property Values. Urban Studies, 8, 3: 171-180. DOI: 10.1080/00420987120080391
  5. Bathelt H., Malmberg A., Maskell P. (2004), Clusters and Knowledge: Local Buzz, Global Pipelines and the Process of Knowledge Creation. Progress in Human Geography, 28, 1: 31-56. DOI: 10.1191/0309132504ph469oa
  6. Baum C. F., Schaffer M. E., Stillman S. (2003), Instrumental Variables and GMM: Estimation and Testing. The Stata Journal, 3, 1: 1-31.
  7. Becker G. (1968), Crime and Punishment: An Economic Approach. Journal of Political Economy, 76, 2: 169-217. DOI: 10.1086/259394
  8. Beckmann M. J., McPherson J. C. (1970), City Size Distribution in a Central Place Hierarchy: an alternative Approach. Journal of Regional Science, 10, 1: 25-33.
  9. Berger M., Blomquist G., Waldner W. (1987), A Revealed-preference Ranking of Quality of Life for Metropolitan Areas. Social Science Quarterly, 68, 4: 761-778.
  10. Blomqvist G., Berger M., Hoehn J. (1988), New Estimates of the Quality of Life in Urban Areas. American Economic Review, 78, 1: 89-107.
  11. Breheny M. (1992), Sustainable Development and Urban Form: An Introduction. In: Breheny M., Owens S. (eds.), Sustainable Development and Urban Form. London: Pion.
  12. Burnell J., Galster G. (1992), Quality-of-life Measurements and Urban Size: An Empirical Note. Urban Studies, 29, 5: 727-735. DOI: 10.1080/00420989220080661
  13. Camagni R. (1993), From City Hierarchy To City Networks: Reflection about an Emerging Paradigm. In: Lakshmanan T. E, Nijkamp P. (eds.), Structure and Change in the Space Economy: Festschrifts in Honour of Martin Beckmann. Berlin: Springer Verlag. 66-87. DOI: 10.1007/978-3-642-78094-3_6
  14. Camagni R. (1999), The City as a Milieu: Applying the GREMI Approach to Urban Evolution. Revue d’Economie Régionale et Urbaine, 3: 591-606.
  15. Camagni R. (2001), The Economic Role and Spatial Contradictions of Global Cityregions: The Functional, Cognitive and Evolutionary Context. In: Scott A. J. (ed.), Global City-regions: Trends, Theory, Policy. Oxford: Oxford University Press. 96-118.
  16. Camagni R. (2011), Principi di economia urbana e territoriale. Roma: Carocci.
  17. Camagni R., Capello R. (2004), The City Network Paradigm: Theory and Empirical Evidence. In: Capello R., Nijkamp P. (eds.), Urban Dynamics and Growth: Advances in Urban Economics. Amsterdam: Elsevier. 495-532. DOI: 10.1016/S0573-8555(04)66016-0
  18. Camagni R., Diappi L., Leonardi G. (1986), Urban Growth and Decline in a Hierarchical System: A Supply-oriented Dynamic Approach. Regional Science and Urban Economics, 16, 1: 145-160. DOI: 10.1016/0166-0462(86)90017-7
  19. Camagni R., Gibelli M. C., Rigamonti P. (2002), Urban Mobility and Urban Form: The Social and Environmental Costs of Different Patterns of Urban Expansion. Ecological Economics, 40, 2: 199-216. DOI: 10.1016/S0921-8009(01)00254-3
  20. Capello R., Rietveld P. (1998), The Concept of Network Synergy in Economic Theory: Policy Implications. In: Button K., Nijkamp P., Priemus H. (eds.), Transport Networks in Europe. Cheltenham: Edward Elgar. 57-83.
  21. Carlino G. (1980), Contrast in Agglomeration: New York and Pittsburgh Reconsidered. Urban Studies, 17, 3: 343-351. DOI: 10.1080/00420988020080651
  22. Carlino J., Saiz A. (2008), Beautiful City: Leisure Amenities and Urban Growth. Philadelphia: Federal Reserve Bank of Philadelphia, FRB of Philadelphia Working Paper n. 08-22.
  23. Cheshire P., Magrini S. (2006), Population Growth in European Cities: Weather Matters - but Only Nationally. Regional Studies, 40, 1: 23-37.
  24. Chesnais F. (1988), Technical Co-operation Agreements between Firms. STI Review, No. 4. Paris: OECD.
  25. Chinitz B. (1961), Contrast in Agglomeration: New York and Pittsburgh. American Economic Review, Papers, 51, 2: 279-289.
  26. Ciccone A., Hall R. E. (1996), Productivity and the Density of Economic Activity. American Economic Review, 86, 1: 54-70.
  27. Clark C. (1945), The Economic Functions of a city in Relation to its Size. Econometrica, 13, 2: 97-113. DOI: 10.2307/1907009
  28. Clark D., Cosgrave J. (1991), Amenities Versus Labour Market Opportunities: Choosing the Optimal Distance to Move. Journal of Regional Science, 31, 3: 311-328. DOI: 10.1111/j.1467-9787.1991.tb00150.x
  29. Clark D., Kahn J. (1989), The Two Stage Hedonic Wage Approach: A Methodology for the Valuation of Environmental Amenities. Journal of Environmental Economics and Management, 16: 106-120. DOI: 10.1016/0095-0696(89)90002-8
  30. Conway H., Liston L. (1981), The Good Life Index. Atlanta: Conway Publications.
  31. Cragg J. G., Donald S. G. (1993), Testing Identifiability and Specification in Instrumental Variables Models. Econometric Theory, 9, 2: 222-240. DOI: 10.1017/S0266466600007519
  32. Douglas R. (1967), Selected Indices of Industrial Characteristics for US: Metropolitan Statistical Areas, 1963. Philadelphia: Regional Science Research Institute, Discussion Paper n. 20.
  33. Duncan O. (1956), The Optimum Size of Cities. In: Spengler J., Duncan O. (eds.), Demographic Analysis. Glencoe, IL: The Free Press. 372-385.
  34. EEA - European Environment Agency (2006), Urban Sprawl in Europe: The Ignored Challenge. Copenhagen: EEA Report n. 10.
  35. EUROSTAT (2004), Urban Audit – Methodological Handbook. Luxemburg: Office for official publications of the European Communities.
  36. EUROSTAT (2010), Urban Audit Metadata. (http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/en/urb_esms.htm - last access June 2013).
  37. Faggian A., McCann P. (2009), Human Capital, Graduate Migration and Innovation in British Regions. Cambridge Journal of Economics, 33, 2: 317-333. DOI: 10.1093/cje/ben042
  38. FOCI (2010), Future Orientation of Cities, Final Report (available at www.espon.eu).
  39. Fujita M. (1989), Urban Economic Theory: Land Use and City Size. Cambridge: Cambridge University Press. DOI: 10.1017/CBO9780511625862
  40. Fujita M., Krugman P., Mori T. (1999), On the Evolution of Hierarchical Urban Systems. European Economic Review, 43, 2: 209-251. DOI: 10.1016/S0014-2921(98)00066-X
  41. Fujita M., Thisse J. F. (1996), Economics of Agglomeration. Journal of Japanese and International Economies, 10, 4: 339-378. DOI: 10.1006/jjie.1996.0021
  42. Glaeser E. L. (2008), Cities, Agglomeration and Spatial Equilibrium. Oxford: Oxford University Press.
  43. Glaeser E. L., Kahn M. E. (2004), Sprawl and Urban Growth. In: Henderson J. V., Thisse J. F. (eds.), Handbook of Regional and Urban Economics, Vol. 4: Cities and geography. Amsterdam: Elsevier. 2481-2527.
  44. Glaeser E. L., Kallal H., Scheinkman J. A., Shleifer A. (1992), Growth in Cities. Journal of Political Economy, 100, 6: 1126-1152. DOI: 10.1086/261856
  45. Glaeser E. L., Mare D. C. (2001), Cities and Skills. Journal of Labor Economics, 19, 2: 316-342. DOI: 10.1086/319563
  46. Glaeser E. L., Sacerdote B. (1999), Why is there More Crime in Cities?. Journal of Political Economy, 107, 6: S225-S258. DOI: 10.1086/250109
  47. Henderson J. (1974), The Sizes and Types of Cities. The American Economic Review, 64, 4: 640-656.
  48. Henderson J. (1995), Comment on ‘Urban Concentration: The Role of Increasing Returns and Transport Costs’ by Krugman. Proceedings of the World Bank Annual Conference on Development Economics 1994. Washington: The Wold Bank. 270-274.
  49. Henderson J. (1996), Ways to Think about Urban Concentration: Neoclassical Urban Systems vs. the New Economic Geography. International Regional Science Review, 19, 1-2: 31-36.
  50. Herzog H., Schlottmann A. (1993), Valuing Amenities and Disamenities of Urban Scale: Can Bigger be Better?. Journal of Regional Science, 33, 2: 145-165. DOI: 10.1111/j.1467-9787.1993.tb00218.x
  51. Hirsch W. Z. (1968), The Supply of Urban Public Services. In: Perloff H., Wingo L. (eds.), Issues in Urban Economics. Baltimore: John Hopkins Press.
  52. Izraeli O. (1987), The Effect of Environmental Attributes on Earnings and Housing Values across SMSAs. Journal of Urban Economics, 22, 3: 361-376. DOI: 10.1016/0094-1190(87)90033-7
  53. Jacobs J. (1969), The Economy of Cities. New York: Reom House.
  54. Krugman P. (1995), Urban Concentration: The Role of Increasing Returns and Transport Costs. Proceedings of the World Bank Annual Conference on Development Economics 1994. Washington: The World Bank. 241-263
  55. Ladd H. (1992), Population Growth, Density and the Costs of Providing Public Services. Urban Studies, 29, 2: 237-295. DOI: 10.1080/00420989220080321
  56. Liu B. (1976), Quality of Life Indicators in US Metropolitan Areas. New York: Praeger.
  57. Martin P., Mayer T., Mayneris F. (2011), Spatial Concentration and Plant-level Productivity in France. Journal of Urban Economics, 69, 2:182-195.
  58. McCann P., Acs Z. (2011), Globalization: Countries, Cities and Multinationals. Regional Studies, 45, 1: 17-32.
  59. Mera K. (1973), On the Urban Agglomeration and Economic Efficiency. Economic Development and Cultural Change, 21: 309-324. DOI: 10.1086/450630
  60. Moomaw R. (1983), Is Population Scale Worthless Surrogate for Business Agglomeration Economies?. Regional Science and Urban Economics, 13, 4: 525-545. DOI: 10.1016/0166-0462(83)90033-9
  61. Owens S. (1992), Energy, Environmental Sustainability and Land-use Planning. In: Breheny M., Owens S. (eds.), Sustainable Development and Urban Form. London: Pion.
  62. Partridge M. D. (2010), The Dueling Models: NEG vs Amenity Migration in Explaining US Engines of Growth. Papers in Regional Science, 89, 3: 513-536. DOI: 10.1111/j.1435-5957.2010.00315.x
  63. Polanyi M. (1966), The Tacit Dimension. New York: Doubleday & Co.
  64. Reggiani A., Nijkamp P. (2012), Did Zipf Anticipate Socio-economic Spatial Networks?. Bologna: Università di Bologna, Dipartimento Scienze Economiche, DSE Working Paper n. 816.
  65. Richardson H. (1972), Optimality in City Size, Systems of Cities and Urban Policy: A Sceptic’s View. Urban Studies, 9, 1: 29-47. DOI: 10.1080/00420987220080021
  66. Richardson H. (1978), Regional and Urban Economics. Harmondsworth: Penguin Books.
  67. Roback J. (1982), Wages, Rents, and the Quality of Life. The Journal of Political Economy, 90, 6: 1257-1278. DOI: 10.1086/261120
  68. Roback J. (1988), Wages, Rents and Amenities: Differences Among Workers and Regions. Economic Inquiry, 26, 1: 23-41. DOI: 10.1111/j.1465-7295.1988.tb01667.x
  69. Rosen S. (1979), Wage-based Indices of Urban Quality of Life. In: Mieszkowski P., Straszheim M. (eds.), Current Issues in Urban Economics. Baltimore: Johns Hopkins University Press. 74-104.
  70. Segal D. (1976), Are there Returns to Scale in City Size?. Review of Economics and Statistics, 58: 339-250. DOI: 10.2307/1924956
  71. Shefer D. (1973), Localization Economies in SMSA’S: a Production Function Analysis. Journal of Regional Science, 13: 55-64. DOI: 10.1111/j.1467-9787.1973.tb00377.x
  72. Simon H. (1955), On a Class of Skew Distribution Functions. Biometrica, 42, 3-4: 425-440.
  73. Stock J. H., Watson M. W. (2012), Introduzione all’Econometria. Italia: Pearson Education.
  74. Sveikauskas L. (1975), The Productivity of City Size. Quarterly Journal of Economics, 89: 393-413. DOI: 10.2307/1885259
  75. Sveikauskas L., Gowdy J., Funk M. (1988), Urban Productivity: City Size or Industry Size. Journal of Regional Science, 28, 2: 185-202. DOI: 10.1111/j.1467-9787.1988.tb01207.x
  76. Syverson C. (2011), What Determines Productivity?. Journal of Economic Literature, 49, 2: 326-365. DOI: 10.1257/jel.49.2.326
  77. Uzawa H. (1962), Production Functions with Constant Elasticities of substitution. Review of Economic Studies, 29, 4: 291-299. DOI: 10.2307/229630
  78. Valvanis S. (1955), Lösch on location. American Economic Review, 45, 4: 637-644.
  79. Wilkinson R. K. (1973), House Prices and Measurement of Externalities. The Economic Journal, 83, 329: 72-86. DOI: 10.2307/2231101
  80. Zipf G. K. (1949), Human Behavior and the Principle of Least Effort. Boston: Addison-Wesley.

  • Il ruolo delle piccole e medie città nell'economia 3.0. Evidenze dal caso italiano Fabiano Compagnucci, Augusto Cusinato, in SCIENZE REGIONALI 2/2016 pp.61
    DOI: 10.3280/SCRE2016-002004
  • Analysis and Development of Sustainable Urban Production Systems Max Juraschek, pp.39 (ISBN:978-3-030-76601-6)

Roberto Camagni, Roberta Capello, Andrea Caragliu, Una o infinite dimensioni urbane ottime? Alla ricerca di una dimensione di equilibrio in "SCIENZE REGIONALI " 3/2013, pp 53-88, DOI: 10.3280/SCRE2013-003003