In Search of a Spatial Equilibrium in the Developing World

Douglas Gollin (), David Lagakos and Martina Kirchberger

No 12114, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In most developing countries, there is a large gap in income per head between urban and rural areas. One appealing interpretation of this gap is that it reflects a spatial equilibrium, in which the higher incomes of urban areas are offset by lower non-monetary amenities. In this paper, we draw on new high-resolution evidence to document how amenities vary across space within twenty developing countries. We focus on measures of health, housing quality, crime and pollution. These vary substantially across space, and they can be carefully measured with highly comparable data. We find that in almost all countries, and for almost all measures, amenities are constant or increasing in population density. In addition, net internal migration flows are directed toward denser areas in every country. These findings are hard to reconcile with a spatial equilibrium. Instead, they suggest that developing countries are undergoing a reallocation of workers to densely populated areas, which offer higher living standards on average.

Keywords: Spatial equilibrium; Living standards; Amenities; Disamenities; Development; Migration (search for similar items in EconPapers)
JEL-codes: O11 O15 O18 R12 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Working Paper: In Search of a Spatial Equilibrium in the Developing World (2017)
Working Paper: In Search of a Spatial Equilibrium in the Developing World (2017)
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