We analyze the efficiency of urbanization patterns in a stylized dynamic model of urban growth with three sectors of production. Pollution, as a force that discourages agglomeration, is caused by domestic production. We show that cities are too large and too few in number in uncoordinated...

We analyze the efficiency of urbanization patterns in a stylized dynamic model of urban growth with three sectors of production. Pollution, as a force that discourages agglomeration, is caused by domestic production. We show that cities are too large and too few in number in uncoordinated...

As a unified discipline, econometrics is still relatively young and has been transforming and expanding very rapidly over the past few decades. Major advances have taken place in the analysis of cross sectional data by means of semi-parametric and non-parametric techniques. Heterogeneity of...

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning—longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet...

China's Hukou system poses severe restrictions on labor mobility. This paper assesses the consequences of relaxing these restrictions for China's internal economic geography. We base our analysis on a new economic geography model. First, we obtain estimates of the important model parameters on...

The evolution of city growth is usually studied for relatively short time periods. The rise and decline of cities is, however, typically a process that takes many decades or even centuries. In this paper we study the evolution of Italian cities over the period 1300-1861. The first contribution...

What are the long run consequences of planning and providing basic infrastructure in neighborhoods, where people build their own homes? We study “Sites and Services” projects implemented in seven Tanzanian cities during the 1970s and 1980s, half of which provided infrastructure in previously...

The political unification of Italy in 1861 led to the establishment of a single market, by removing the trade barriers across the pre-existing states, with a single currency. Market integration was the economic outcome of this process. At the same time, the Kingdom of Italy started a large...

Using a natural experiment from Germany, we show that temporary place-based subsidies generate persistent effects on economic density. We identify employment and capital formation as main channels for higher income per square kilometer. As the spatial regression discontinuity design allows us to...

We design a spatial model featuring workers embodied with heterogeneous skills. In equilibrium, locations with improved market access become relatively more attractive to the high-skilled, high-income earners. We then empirically analyze the effects of the construction of the Swiss highway...