The Identification of Agglomeration Economies

Pierre-Philippe Combes (1) , Gilles Duranton (2) , Laurent Gobillon (3)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 Department of Economics
3 INED - Institut national d'études démographiques

Measures of urban productivity are typically positively associated with city population. But is this relationship causal? We discuss the main sources of bias in the proper identification of agglomeration effects. We also assess a variety of solutions that have been proposed in the literature to deal with them.

Mots clés: agglomeration economies; instrumental variables; structural estimation; natural experiments

Domaines: Economies et finances

Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon. The Identification of Agglomeration Economies. 2010. ⟨halshs-00535593⟩