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 Code: R00, R11