The relationship between economic growth and urbanisation quantitative research

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journal article

Land Economics

Vol. 37, No. 3 (Aug., 1961)

, pp. 229-245 (17 pages)

Published By: University of Wisconsin Press

https://doi.org/10.2307/3159722

https://www.jstor.org/stable/3159722

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Journal Information

Land Economics is dedicated to the study of land use, natural resources, public utilities, housing, and urban land issues. Established in 1925 by the renowned economist Richard T. Ely, LE publishes innovative, conceptual, and empirical research of direct relevance to economists. Each issue brings the latest results in international applied research on such topics as transportation, energy, urban and rural land use, housing, environmental quality, public utilities, and natural resources.

Publisher Information

The University of Wisconsin Press, a division of the UW-Madison Graduate School, has published more than 3000 titles, and currently has more than 1500 scholarly, regional, and general interest books in print. The Press publishes ten peer-reviewed academic and professional journals in the humanities, social sciences, and medicine. See the Journals Division Web site for more information.

32 Pages Posted: 3 Mar 2020 Last revised: 10 Jun 2020

Date Written: February 27, 2020

Abstract

The association between levels of urbanization and per capita incomes is one of the best known and most robust empirical regularities characterizing national economic growth. Many studies have analyzed available data towards establishing causal patterns, relating economic growth to urbanization and distinguishing dynamical regimes associated with contextual factors such as policy, institutions or culture. However, the derivation of the origins of the observed correlations in mathematical terms has apparently not yet been accomplished. Here, we show how it arises from the properties of cities, including endogenous urban growth and selection effects, whereby a growing fraction of a nation’s population lives in larger urban areas, which manifest higher per capita income due to agglomeration effects. The resulting mathematical formulation allows for an exact decomposition of economic growth across scales - from individuals and households to firms, cities and nations - showing how aggregated processes result from population averaged growth and structural changes.

Keywords: Economic Growth, Price Equation, Choice, Levels of Selection, Institutions

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