The optimal distribution of population across cities

David Albouy, Kristian Behrens (), Frederic Robert-Nicoud and Nathan Seegert

Journal of Urban Economics, 2019, vol. 110, issue C, 102-113

Abstract: We develop an urban model that incorporates: (1) heterogeneous sites; (2) fiscal and urban externalities; and (3) an endogenous number of cities, i.e., the extensive margin of urban development. Within- and across-city decreasing returns to scale cause agents to perceive their city as being too large in the socially optimal allocation. As a consequence, in equilibrium the largest cities on the most amenable sites are undersized, whereas the smaller cities on less amenable sites are oversized. We propose a test for optimal city size with heterogeneous sites extending the Henry George Theorem.

Keywords: Optimal and equilibrium city sizes; Fiscal wedges; Local governments; Henry George Theorem (search for similar items in EconPapers)
JEL-codes: H73 J61 R12 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (33)

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Related works:
Working Paper: The optimal distribution of population across cities (2016)
Working Paper: The Optimal Distribution of Population across Cities (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:110:y:2019:i:c:p:102-113

DOI: 10.1016/j.jue.2018.08.004

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