The Economics of Density: Evidence From the Berlin Wall
Экономика плотности: свидетельства, полученные на основе Берлинской стены
2015-01-01
SCID: 54.1/5qy6hdms
Discuss with AI
Berlin Wall division and reunificationagglomeration and dispersion forcescommuting flowsgravity equationurban economics
Figures from the paper
Abstract (AI)
This paper develops a quantitative model of internal city structure that features agglomeration and dispersion forces and an arbitrary number of heterogeneous city blocks. The model remains tractable and amenable to empirical analysis because of stochastic shocks to commuting decisions, which yield a gravity equation for commuting flows. To structurally estimate agglomeration and dispersion forces, we use data on thousands of city blocks in Berlin for 1936, 1986 and 2006 and exogenous variation from the city’s division and reunification. We estimate substantial and highly localized production and residential externalities. We show that the model with the estimated agglomeration parameters can account both qualitatively and quantitatively for the observed changes in city structure. We show how our quantitative framework can be used to undertake counterfactuals for changes in the organization of economic activity within cities in response for example to changes in the transport network.
Key Findings
1
Stochastic commuting shocks generate a gravity equation for commuting flows, enabling structural estimation of urban agglomeration and dispersion forces.
2
The estimated agglomeration parameters explain both qualitatively and quantitatively the observed evolution of Berlin’s city structure.
3
The framework supports counterfactual analysis of how changes in transport networks could reorganize economic activity within cities.
4
The paper develops a tractable quantitative model of internal city structure incorporating agglomeration, dispersion, and heterogeneous city blocks.
5
Using Berlin block-level data from 1936, 1986, and 2006, plus exogenous variation from division and reunification, the authors estimate substantial, highly localized production and residential externalities.
Research Object
Berlin’s internal city structure, represented by heterogeneous city blocks and their production and residential activity, before, during, and after the city’s division and reunification
Research Subject
Localized agglomeration and dispersion forces—specifically production and residential externalities—and their effects on urban density and the spatial organization of economic activity
Publication Details
Publication Date
2015-01-01
Journal
Publisher
ISSN
Cited by
754
Open access PDF
Access Type
Author Information
Download PDF
Subscribe to digest