A Productivity Model of City Crowdedness

Abstract:     
Population density varies widely across U.S. cities. A simple, static general equilibrium model suggests that moderate-sized differences in cities' total factor productivity can account for such variation. Nevertheless, the productivity required to sustain above-average population densities considerably exceeds estimates of the increase in productivity caused by such high density. In contrast, increasing returns to scale may be able to sustain multiple equilibria at below-average population densities.

Number of Pages in PDF File: 36

Keywords: Population Density, Productivity, Urban Agglomeration

JEL Classification: O40, R12, R13

working papers series