TY  - JOUR
AU  - Ciccone,Antonio
AU  - Hall,Robert E.
TI  - Productivity and the Density of Economic Activity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4313
PY  - 1996
Y2  - May 1996
UR  - http://www.nber.org/papers/w4313
L1  - http://www.nber.org/papers/w4313.pdf
N1  - Author contact info:
Antonio Ciccone
Universitat Pompeu Fabra
E-Mail: antonio.ciccone@upf.edu

Robert E. Hall
Hoover Institution
Stanford University
Stanford, CA  94305-6010
Tel: 650/723-2215
E-Mail: rehall@gmail.com
AB  - Two different models - one based on local geographical externalities and the other on the variety of only locally available intermediate services - are shown to give rise to a simple, estimable relation between employment density and productivity. Using data on gross state output for the U.S., we find that agglomeration more than offsets congestion effects in denser areas. While our estimate of the elasticity of productivity with respect to density is small, it explains more than 50% of the observed state productivity differences, given the large differences in density.
ER  -