The Economics of Urban Density

27 Pages Posted: 20 May 2020

See all articles by Gilles Duranton

Gilles Duranton

University of Pennsylvania - Real Estate Department

Diego Puga

Centre for Monetary and Financial Studies (CEMFI)

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Date Written: May 2020

Abstract

Urban density boosts productivity and innovation, improves access to goods and services, reduces typical travel distances, encourages energy-efficient construction and transport, and facilitates sharing scarce amenities. However, density is also synonymous with crowding, makes living and moving in cities more costly, and concentrates exposure to pollution and disease. We explore the appropriate measurement of density and describe how it is both a cause and a consequence of the evolution of cities. We then discuss whether and how policy should target density and why the trade-off between its pros and cons is unhappily resolved by market and political forces.

Keywords: agglomeration, density, Urban costs

JEL Classification: R12, R31, R32

Suggested Citation

Duranton, Gilles and Puga, Diego, The Economics of Urban Density (May 2020). CEPR Discussion Paper No. DP14768, Available at SSRN: https://ssrn.com/abstract=3604000

Gilles Duranton (Contact Author)

University of Pennsylvania - Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

Diego Puga

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

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