In Search of a Spatial Equilibrium in the Developing World

68 Pages Posted: 4 Jul 2017

See all articles by Douglas Gollin

Douglas Gollin

Oxford Department of International Development; Williams College; Yale University

Martina Kirchberger

Columbia University

David Lagakos

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2017

Abstract

In most developing countries, there is a large gap in income per head between urban and rural areas. One appealing interpretation of this gap is that it reflects a spatial equilibrium, in which the higher incomes of urban areas are offset by lower non-monetary amenities. In this paper, we draw on new high-resolution evidence to document how amenities vary across space within twenty developing countries. We focus on measures of health, housing quality, crime and pollution. These vary substantially across space, and they can be carefully measured with highly comparable data. We find that in almost all countries, and for almost all measures, amenities are constant or increasing in population density. In addition, net internal migration flows are directed toward denser areas in every country. These findings are hard to reconcile with a spatial equilibrium. Instead, they suggest that developing countries are undergoing a reallocation of workers to densely populated areas, which offer higher living standards on average.

Keywords: amenities, Development, disamenities, living standards, migration, spatial equilibrium

JEL Classification: O11, O15, O18, R12

Suggested Citation

Gollin, Douglas and Kirchberger, Martina and Lagakos, David, In Search of a Spatial Equilibrium in the Developing World (June 2017). CEPR Discussion Paper No. DP12114, Available at SSRN: https://ssrn.com/abstract=2996659

Douglas Gollin (Contact Author)

Oxford Department of International Development ( email )

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Williams College ( email )

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Yale University ( email )

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Martina Kirchberger

Columbia University ( email )

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David Lagakos

University of California, San Diego (UCSD) - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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