Document type
Working paperPublication date
Publication license
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/116590
Growth in a cross-section of cities: location, increasing returns or random growth?
Journal Title
Director/Tutor
Journal ISSN
Volume Title
Related resource
Abstract
This article analyzes empirically the main existing theories on income and population city growth: increasing returns to scale, locational fundamentals and random growth. To do this we implement a threshold nonlinearity test that extends standard linear growth regression models to a dataset on urban, climatological and macroeconòmic variables on 1,175 U.S. cities. Our analysis reveals the existence of increasing returns when per-capita income levels are beyond $19; 264. Despite this, income growth is mostly explained by social and locational fundamentals. Population growth also exhibits two distinct equilibria determined by a threshold value of 116,300 inhabitants beyond which city population grows at a higher rate. Income and population growth do not go hand in hand, implying an optimal level of population beyond which income growth stagnates or deteriorates.
Subject (English)
Citation
Citation
GONZÁLEZ-VAL, Rafael and OLMO ARRIAGA, José Luis del. Growth in a cross-section of cities: location, increasing returns or random growth?. IEB Working Paper 2011/39. [consulted: 16 of June of 2026]. Available at: https://hdl.handle.net/2445/116590