Kaufman Management Center
44 West 4th Street
New York, NY 10012
Thanks to Jonathan Dingel from Columbia University for leading this week’s brown bag discussion on the comparative advantage of cities.
Dingel’s research (with Donald Davis) examines the idea that more skilled individuals are willing to pay more to live near the amenities associated with big city life, and that, compared to smaller cities, bigger cities have larger numbers of high-skilled workers relative to lower-skilled workers. Dingel predicts that these two factors impact a city’s industrial composition and that a city’s comparative advantage is due jointly to individuals’ comparative advantage and locational choices.
Using data on skills, sectors, and cities, the model predicts that cities are neither completely specialized nor completely diversified. This model also allows for the extrapolation of a city’s industrial composition of a city based on its size.
Tile image by: Seldom Scene Photography