Firms are more productive on average in larger cities. Two main explanations have been offered: firm selection (larger cities toughen competition, allowing only the most productive to survive) and agglomeration economies (larger cities promote interactions that increase productivity), possibly...

We develop a new methodology to estimate the elasticity of urban costs with respect to city population using French land price data. Our preferred estimate, which handles a number of estimation concerns, stands at 0.041. Our approach also yields a number of intermediate outputs of independent...