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Measuring Urban Agglomeration: A Refoundation of the Mean City-Population Size Index

Andre Lemelin (), Fernando Rubiera-Morollón () and Ana Gómez-Loscos ()
Authors registered in the RePEc Author Service: Fernando Rubiera Morollón

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2016, vol. 125, issue 2, 589-612

Abstract: In this paper, we put forth the view that the potential for urbanization economies increases with interaction opportunities. From that premise follow three fundamental properties that an agglomeration index should possess: (1) to increase with the concentration of population and conform to the Pigou–Dalton transfer principle; (2) to increase with the absolute size of constituent population interaction zones; and (3) to be consistent in aggregation. Limiting our attention to pairwise interactions, and invoking the space-analytic foundations of local labor market area (LLMA) delineation, we develop an index of agglomeration based on the number of interaction opportunities per capita in a geographical area. This leads to Arriaga’s mean city-population size, which is the mathematical expectation of the size of the LLMA in which a randomly chosen individual lives. The index has other important properties. It does not require an arbitrary population threshold to separate urban from non-urban areas. It is easily adapted to situations where an LLMA lies partly outside the geographical area for which agglomeration is measured. Finally, it can be satisfactorily approximated when data is truncated or aggregated into size-classes. We apply the index to the Spanish NUTS III regions, and evaluate its performance by examining its correlation with the location quotients of several knowledge intensive business services known to be highly sensitive to urbanization economies. The Arriaga index’s correlations are clearly stronger than those of either the classical degree of urbanization or the Hirshman–Herfindahl concentration index. Copyright Springer Science+Business Media Dordrecht 2016

Keywords: Urban and regional economics; Urbanization; Agglomeration economies; Indexes and Spain; R11; R12 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Measuring urban agglomeration. A refoundation of the mean city-population size index (2014) Downloads
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DOI: 10.1007/s11205-014-0846-9

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