Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level
U.S. Department of Agriculture (USDA)
Raymond J.G.M. Florax
Purdue University; VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute
William A. Masters
Tufts University - Friedman School of Nutrition Science and Policy; Tufts University - Department of Economics
November 29, 2013
Tinbergen Institute Discussion Paper 14-002/VIII
This paper addresses the timing of a location's historical transition from rural to urban activity. We test whether urbanization occurs sooner in places with higher agricultural potential and comparatively lower transport costs, using worldwide data that divide the earth's surface at half-degree intervals into 62,290 cells. From an independent estimate of each cell's rural and urban population history over the last 2,000 years, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for unobserved heterogeneity across countries through fixed effects and using a variety of spatial econometric techniques, we find a robust association between earlier urbanization and agro-climatic suitability for cultivation, having seasonal frosts, better access to the ocean or navigable rivers, and lower elevation. These geographic correlations become smaller in magnitude as urbanization proceeds, and there is some variance in effect sizes across continents. Aggregating cells into countries, we show that an earlier urbanization date is associated with higher per capita income today.
Number of Pages in PDF File: 54
Keywords: Economic growth, economic geography, urbanization, agriculture, transportation
JEL Classification: C21, N50, O11, O18, R1
Date posted: January 4, 2014
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