Productivity and the Density of Economic Activity

Antonio Ciccone and Robert Hall ()

No 4313, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Two different models - one based on local geographical externalities and the other on the variety of only locally available intermediate services - are shown to give rise to a simple, estimable relation between employment density and productivity. Using data on gross state output for the U.S., we find that agglomeration more than offsets congestion effects in denser areas. While our estimate of the elasticity of productivity with respect to density is small, it explains more than 50% of the observed state productivity differences, given the large differences in density.

JEL-codes: O40 O47 (search for similar items in EconPapers)
Date: 1993-04
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (632)

Published as American Economic Review, vol. 86, no. 1, pp. 54-70, (March 1996).

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Related works:
Journal Article: Productivity and the Density of Economic Activity (1996)
Working Paper: Productivity and the density of economic activity (1995)
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