The Cost of Agglomeration: Land Prices in Cities

Pierre-Philippe Combes (1, 2) , Gilles Duranton (3) , Laurent Gobillon (4)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 CEPR - Center for Economic Policy Research
3 University of Pennsylvania
4 INED - Institut national d'études démographiques

We develop a new methodology to estimate the elasticity of urban costs with respect to city population using French land price data. Our preferred estimate, which handles a number of estimation concerns, stands at 0.041. Our approach also yields a number of intermediate outputs of independent interest such as a distance gradient for land prices and the elasticity of unit land prices with respect to city population. For the latter, our preferred estimate is 0.72.

Mots clés: Agglomeration; Land Prices; Land Use and Urban Costs

Domaines: Economies et finances

Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon. The Cost of Agglomeration: Land Prices in Cities. 2012. ⟨hal-03461075⟩