A threshold model of urban development

Alberto Vesperoni; Paul Schweinzer

doi:10.1007/s00182-023-00844-5

A threshold model of urban development

Alberto Vesperoni, Paul Schweinzer^*

^*Corresponding author for this work

Political Economy

Alpen-Adria-University of Klagenfurt

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

We propose a simple model of distribution of economic activity across cities of endogenous size and number determined by individual incentives. The individuals populating our model are endowed with idiosyncratic entrepreneurial creativity, the realization of which requires urban agglomeration linked to a crowding cost. Focusing on the dynamics of urban development, our predictions include a U-shaped relation between well-known measures of urbanization and urban primacy, a hypothesis that we test empirically using World Bank data. Our findings complement a growing consensus on U-shaped relations between level and concentration of economic activity across a broad set of applications.

Original language	English
Pages (from-to)	891-924
Number of pages	34
Journal	INTERNATIONAL JOURNAL OF GAME THEORY
Volume	52
Issue number	3
DOIs	https://doi.org/10.1007/s00182-023-00844-5
Publication status	Published - 1 Sept 2023

Keywords

Agglomeration
Development
Urbanization

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1007/s00182-023-00844-5

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abstract = "We propose a simple model of distribution of economic activity across cities of endogenous size and number determined by individual incentives. The individuals populating our model are endowed with idiosyncratic entrepreneurial creativity, the realization of which requires urban agglomeration linked to a crowding cost. Focusing on the dynamics of urban development, our predictions include a U-shaped relation between well-known measures of urbanization and urban primacy, a hypothesis that we test empirically using World Bank data. Our findings complement a growing consensus on U-shaped relations between level and concentration of economic activity across a broad set of applications.",

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AB - We propose a simple model of distribution of economic activity across cities of endogenous size and number determined by individual incentives. The individuals populating our model are endowed with idiosyncratic entrepreneurial creativity, the realization of which requires urban agglomeration linked to a crowding cost. Focusing on the dynamics of urban development, our predictions include a U-shaped relation between well-known measures of urbanization and urban primacy, a hypothesis that we test empirically using World Bank data. Our findings complement a growing consensus on U-shaped relations between level and concentration of economic activity across a broad set of applications.

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KW - Urbanization

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A threshold model of urban development

Abstract

Keywords

UN SDGs

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