The price of productivity

Gabriel M. Ahlfeldt, Stephan Heblich, Tobias Seidel and Fan Yin

No 91, Berlin School of Economics Discussion Papers from Berlin School of Economics

Abstract: We construct a new micro-geographic commercial rent index for Germany to study the capitalization of agglomeration economies into floor space prices. In large local labor markets, commercial rents decline by -17% per kilometer from the central business district, compared to 13% for residential rents, reflecting stronger agglomeration benefits at the center. Commercial rents in central business districts increase with local labor market size at an elasticity of 15%, implying that wage responses capture only about half of the agglomeration effect on total factor productivity.

Keywords: Agglomeration; commercial rent; prime locations; spatial equilibrium; total factor productivity (search for similar items in EconPapers)
JEL-codes: L2 R3 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2026-02-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://opus4.kobv.de/opus4-hsog/files/6111/BSoE_DP_0091.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdp:dpaper:0091

DOI: 10.48462/opus4-6111

Access Statistics for this paper

More papers in Berlin School of Economics Discussion Papers from Berlin School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Reiter ().