Stephen Redding: The Economics of Density
NYU Stern Urbanization Project Brown Bag Discussion Series
Kaufman Management Center
44 West 4th Street
New York, NY 10012
Thanks to Stephen Redding for leading a recent brown bag discussion on a working paper—The Economics of Density: Evidence from the Berlin Wall—that he coauthored with Gabriel Ahlfeldt, Daniel Sturm, and Nikolaus Wolf. Here's the abstract:
"This paper develops a quantitative model of internal city structure that features agglomeration and dispersion forces and an arbitrary number of heterogeneous city blocks. The model remains tractable and amenable to empirical analysis because of stochastic shocks to commuting decisions, which yield a gravity equation for commuting flows. To structurally estimate agglomeration and dispersion forces, we use data on thousands of city blocks in Berlin for 1936, 1986 and 2006 and exogenous variation from the city's division and reunification. We estimate substantial and highly localized production and residential externalities. We show that the model with the estimated agglomeration parameters can account both qualitatively and quantitatively for the observed changes in city structure."
Find a blog post about an earlier version of this working paper here.