The economics of density: evidence from the Berlin wall

Gabriel Ahlfeldt, Stephen Redding, Daniel Sturm and Nikolaus Wolf

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper develops a quantitative model of city structure to separate agglomeration forces, dispersion forces and fundamentals as determinants of location choices. The model remains tractable and amenable to empirical analysis because of stochastic shocks to worker productivity, which yield a gravity equation for commuting flows. To empirically disentangle alternative determinants of location choices, we use Berlin’s division and reunification as a source of exogenous variation in the surrounding concentration of economic activity. Using disaggregated data on land prices, workplace employment and residence employment for thousands of city blocks for 1936, 1986 and 2006, we find that the model can account both qualitatively and quantitatively for the observed changes in city structure.

Keywords: agglomeration; dispersion; density; cities (search for similar items in EconPapers)
JEL-codes: N34 O18 R12 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2012-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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http://eprints.lse.ac.uk/58600/ Open access version. (application/pdf)

Related works:
Journal Article: The Economics of Density: Evidence From the Berlin Wall (2015)
Working Paper: The economics of density: evidence from the Berlin Wall (2015)
Working Paper: The Economics of Density: Evidence from the Berlin Wall (2014)
Working Paper: The Economics of Density: Evidence from the Berlin Wall (2014)
Working Paper: The Economics of Density: Evidence from the Berlin Wall (2013)
Working Paper: The Economics of Density: Evidence from the Berlin Wall (2012)
Working Paper: The Economics of Density: Evidence from the Berlin Wall (2012)
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