Département des sciences économiques
Université du Québec à Montréal
Case postale 8888, Succ. Centre-Ville
Montréal, (Québec) Canada H3C 3P8
Information about this author at RePEc
NBER Working Papers and Publications
|November 2016||The Optimal Distribution of Population across Cities|
with David Albouy, Frédéric Robert-Nicoud, Nathan Seegert: w22823
The received economic wisdom is that cities are too big and that public policy should limit their sizes. This wisdom assumes, unrealistically, that city sites are homogeneous, migration is unfettered, land is given freely to incoming migrants, and federal taxes are neutral. Should those assumptions not hold, large cities may be inefficiently small. We prove this claim in a system of cities with heterogeneous sites and either free mobility or local governments, where agglomeration economies, congestion, federal taxation, and land ownership create wedges. A quantitative version of our model suggests that cities may well be too numerous and underpopulated for a wide range of plausible parameter values. The welfare costs of free migration equilibria appear small, whereas they seem substantial...
Published: David Albouy & Kristian Behrens & Frédéric Robert-Nicoud & Nathan Seegert, 2018. "The optimal distribution of population across cities," Journal of Urban Economics, .