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The economic effects of density: a synthesis

Ahlfeldt, Gabriel M. and Pietrostefani, Elisabetta (2019) The economic effects of density: a synthesis. International Trade and Regional Economics (DP13440). Centre for Economic Policy Research, London School of Economics and Political Science.

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Abstract

This paper synthesises the state of knowledge on the economic effects of density. We consider 15 outcome categories and 347 estimates of density elasticities from 180 studies. More than 100 of these estimates have not been previously published and have been provided by authors on request or inferred from published results in auxiliary analyses. We contribute own estimates of density elasticities of 16 distinct outcome variables that belong to categories where the evidence base is thin, inconsistent or non-existent. Along with a critical discussion of the quality and the quantity of the evidence base we present a set of recommended elasticities. Applying them to a scenario that roughly corresponds to an average high-income city, we find that in per-capita present value terms (at a 5% discount rate), a 1%-increase in density implies an increase in wage and rent of $280 and $347. The decrease in real wage net of taxes of $156 is partially compensated for by an aggregate amenity effect of $100 and there is a positive external welfare effect of $60.

Item Type: Monograph (Discussion Paper)
Additional Information: © 2019 The Authors
Divisions: Geography & Environment
Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
JEL classification: R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R38 - Government Policies; Regulatory Policies
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy
Date Deposited: 01 Feb 2019 00:00
Last Modified: 20 Nov 2020 02:57
URI: http://eprints.lse.ac.uk/id/eprint/100004

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