[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/7051.html
   My bibliography  Save this paper

A dynamic spatial model of rural-urban transformation with public goods

Author

Listed:
  • Biller, Dan
  • Andres, Luis
  • Cuberes, David
Abstract
This paper develops a dynamic model that explains the pattern of population and production allocation in an economy with an urban location and a rural one. Agglomeration economies make urban dwellers benefit from a larger population living in the city and urban firms become more productive when they operate in locations with a larger labor force. However, congestion costs associated with a too large population size limit the process of urban-rural transformation. Firms in the urban location also benefit from a public good that enhances their productivity. The model predicts that in the competitive equilibrium the urban location is inefficiently small because households fail to internalize the agglomeration economies and the positive effect of public goods in urban production.

Suggested Citation

  • Biller, Dan & Andres, Luis & Cuberes, David, 2014. "A dynamic spatial model of rural-urban transformation with public goods," Policy Research Working Paper Series 7051, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7051
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/10/01/000158349_20141001084829/Rendered/PDF/WPS7051.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:bla:econom:v:48:y:1981:i:191:p:219-34 is not listed on IDEAS
    2. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-656, September.
    3. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, April.
    4. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    5. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 299-322, National Bureau of Economic Research, Inc.
    6. Arnott, Richard, 2007. "Congestion tolling with agglomeration externalities," Journal of Urban Economics, Elsevier, vol. 62(2), pages 187-203, September.
    7. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    8. Cuberes David, 2009. "A Model of Sequential City Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-41, May.
    9. Vernon Henderson & Anthony Venables, 2009. "Dynamics of city formation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(2), pages 233-254, April.
    10. J. Vernon Henderson & Hyoung Gun Wang, 2005. "Aspects of the rural-urban transformation of countries," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 23-42, January.
    11. Anas, Alex, 1978. "Dynamics of urban residential growth," Journal of Urban Economics, Elsevier, vol. 5(1), pages 66-87, January.
    12. Palivos, Theodore & Wang, Ping, 1996. "Spatial agglomeration and endogenous growth," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 645-669, December.
    13. Gillespie, Fran, 1983. "Comprehending the Slow Pace of Urbanization in Paraguay between 1950 and 1972," Economic Development and Cultural Change, University of Chicago Press, vol. 31(2), pages 355-375, January.
    14. Moretti, Enrico, 2004. "Human capital externalities in cities," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 51, pages 2243-2291, Elsevier.
    15. Henderson, J. Vernon & Wang, Hyoung Gun, 2007. "Urbanization and city growth: The role of institutions," Regional Science and Urban Economics, Elsevier, vol. 37(3), pages 283-313, May.
    16. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    17. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
    18. repec:bla:econom:v:55:y:1988:i:217:p:123-27 is not listed on IDEAS
    19. Fujita, Masahisa, 1982. "Spatial patterns of residential development," Journal of Urban Economics, Elsevier, vol. 12(1), pages 22-52, July.
    20. Henderson, J Vernon & Kuncoro, Ari, 1996. "Industrial Centralization in Indonesia," The World Bank Economic Review, World Bank, vol. 10(3), pages 513-540, September.
    21. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(3), pages 549-576.
    22. Kanemoto, Yoshitsugu, 1980. "Externality, migration, and urban crises," Journal of Urban Economics, Elsevier, vol. 8(2), pages 150-164, September.
    23. Richardson, Harry W, 1987. "The Costs of Urbanization: A Four-Country Comparison," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 561-580, April.
    24. Henderson, J. Vernon & Ioannides, Yannis M., 1981. "Aspects of growth in a system of cities," Journal of Urban Economics, Elsevier, vol. 10(1), pages 117-139, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiwei Li & Qingqing Ye & Weiqiang Chen & Xuesong Kong & Qingsheng Bi & Jie Lu & Enxiang Cai & Hejie Wei & Xinwei Feng & Yulong Guo, 2022. "An Analysis Method of Quantitative Coupling Rationality between Urban–Rural Construction Land and Population: A Case Study of Henan Province in China," Land, MDPI, vol. 11(5), pages 1-18, May.
    2. Chisari, Omar O. & Miller, Sebastián J., 2016. "Climate Change and Migration: A CGE Analysis for Two Large Urban Regions of Latin America," IDB Publications (Working Papers) 7510, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gilles Duranton, 2007. "From cities to productivity and growth in developing countries," Working Papers tecipa-306, University of Toronto, Department of Economics.
    2. J. Vernon Henderson, 2010. "Cities And Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 515-540, February.
    3. Desmet, Klaus & Henderson, J. Vernon, 2015. "The Geography of Development Within Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1457-1517, Elsevier.
    4. Henderson, J. Vernon & Thisse, Jacques-François, 2024. "Urban and spatial economics after 50 years," LSE Research Online Documents on Economics 125675, London School of Economics and Political Science, LSE Library.
    5. J. Vernon Henderson, 2003. "Urbanization and Economic Development," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 275-341, November.
    6. Overman, Henry G. & Venables, Anthnony J., 2010. "Evolving City Systems," WIDER Working Paper Series 026, World Institute for Development Economic Research (UNU-WIDER).
    7. Henry Overman & Anthony J. Venables, 2005. "Cities in the Developing World," CEP Discussion Papers dp0695, Centre for Economic Performance, LSE.
    8. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    9. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    10. William C. Strange, 2009. "Viewpoint: Agglomeration research in the age of disaggregation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 1-27, February.
    11. Henderson, J. Vernon & Wang, Hyoung Gun, 2007. "Urbanization and city growth: The role of institutions," Regional Science and Urban Economics, Elsevier, vol. 37(3), pages 283-313, May.
    12. Marcus Berliant & Ping Wang, 2005. "Dynamic Urban Models: Agglomeration and Growth," Contributions to Economic Analysis, in: Urban Dynamics and Growth: Advances in Urban Economics, pages 533-581, Emerald Group Publishing Limited.
    13. Fu, Shihe, 2007. "Smart Cafe Cities: Testing human capital externalities in the Boston metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(1), pages 86-111, January.
    14. Guy Michaels & Ferdinand Rauch & Stephen J. Redding, 2012. "Urbanization and Structural Transformation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(2), pages 535-586.
    15. Huang, Ruting & Yao, Xin, 2024. "City size and energy efficiency of Chinese manufacturing firms: An empirical study from a city characteristic perspective," Energy Economics, Elsevier, vol. 129(C).
    16. Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 28-55, February.
    17. Charlie Karlsson & Börje Johansson & Roger R. Stough, 2012. "Introduction – Human Capital and Agglomeration," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), The Regional Economics of Knowledge and Talent, chapter 1, Edward Elgar Publishing.
    18. Henderson, J. Vernon, 2005. "Urbanization and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 24, pages 1543-1591, Elsevier.
    19. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    20. Henry G. Overman & Anthony J. Venables, 2010. "Evolving City Systems," WIDER Working Paper Series wp-2010-026, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Economic Theory&Research; Population Policies; Urban Housing and Land Settlements; National Urban Development Policies&Strategies; Labor Policies;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:7051. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.