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In Search of a Spatial Equilibrium in the Developing World

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  • Douglas Gollin
  • Martina Kirchberger
  • David Lagakos
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.

Suggested Citation

  • Douglas Gollin & Martina Kirchberger & David Lagakos, 2017. "In Search of a Spatial Equilibrium in the Developing World," CSAE Working Paper Series 2017-09, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2017-09
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    Cited by:

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    9. Stöcker, Alexander & Baskaran, Thushyanthan & Hufschmidt, Patrick, 2023. "Political favoritism and internal migration in Benin," Ruhr Economic Papers 1031, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Martorano, Bruno & Metzger, Laura & Sanfilippo, Marco, 2020. "Chinese development assistance and household welfare in Sub-Saharan Africa," World Development, Elsevier, vol. 129(C).
    11. Md Mahbubur Rahman & Oksana Leukhina & Raghav Paul, 2018. "Why is Agricultural Productivity So Low in Poor Countries? The Case of India," 2018 Meeting Papers 1305, Society for Economic Dynamics.
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    13. Christian Düben & Melanie Krause, 2021. "Population, light, and the size distribution of cities," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 189-211, January.
    14. Rémi Jedwab & Adam Storeygard, 2022. "The Average and Heterogeneous Effects of Transportation Investments: Evidence from Sub-Saharan Africa 1960–2010," Journal of the European Economic Association, European Economic Association, vol. 20(1), pages 1-38.
    15. Johan Mottelson, 2020. "A New Hypothesis on Informal Land Supply, Livelihood, and Urban Form in Sub-Saharan African Cities," Land, MDPI, vol. 9(11), pages 1-22, November.
    16. Baysan, Ceren & Dar, Manzoor H. & Emerick, Kyle & Li, Zhimin & Sadoulet, Elisabeth, 2024. "The agricultural wage gap within rural villages," Journal of Development Economics, Elsevier, vol. 168(C).
    17. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    18. Jan Willem Gunning & Pramila Krishnan & Andualem T. Mengistu, 2024. "Fading choice: transport costs and variety in consumer goods," Economica, London School of Economics and Political Science, vol. 91(363), pages 1100-1123, July.
    19. Yating Ru & Beliyou Haile & John I. Carruthers, 2022. "Urbanization and child growth failure in Sub-Saharan Africa: a geographical analysis," Journal of Geographical Systems, Springer, vol. 24(3), pages 441-473, July.
    20. Mayneris, Florian & Martin, Julien & Theophile, Ewane, 2020. "The price of remoteness: Product availability and local cost of living in Ethiopia," CEPR Discussion Papers 14515, C.E.P.R. Discussion Papers.
    21. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).
    22. Kriticos, Sebastian & Henderson, J. Vernon, 2019. "The prospects for manufacturing-led growth in Africa’s cities," LSE Research Online Documents on Economics 103073, London School of Economics and Political Science, LSE Library.
    23. Jedwab, Remi & Loungani, Prakash & Yezer, Anthony, 2021. "Comparing cities in developed and developing countries: Population, land area, building height and crowding," Regional Science and Urban Economics, Elsevier, vol. 86(C).
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    More about this item

    Keywords

    spatial equilibrium; urban-rural income gaps; agricultural productivity gap; living standards; population density;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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