Paper by Fellow Raymond Florax published in the Journal of Economic Growth
Fellow Raymond Florax’s paper “Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level” by Mesbah J. Motamed, Raymond J.G.M. Florax (FEWEB/TI) and William A. Masters has been published in the Journal of Economic Growth (DOI 10.1007/s10887-014-9104-x). A working paper version with data appendix is available as TI working paper #14-002/VIII.
Abstract
The paper addresses the timing of a location’s historical transition from rural to urban activity. The authors test whether urbanization occurs sooner in places with higher agricultural potential and comparatively lower transport costs, using worldwide data that divide the earth’s surface at half-degree intervals into 62,290 cells. From an independent estimate of each cell’s rural and urban population history over the last 2,000 years, they identify the date at which each cell achieves various thresholds of urbanization. Controlling for unobserved heterogeneity across countries through fixed effects and using a variety of spatial econometric techniques, they find a robust association between earlier urbanization and agro-climatic suitability for cultivation, having seasonal frosts, better access to the ocean or navigable rivers, and lower elevation. These geographic correlations become smaller in magnitude as urbanization proceeds, and there is some variation in the effects across continents. Aggregating cells into countries, the authors show that an earlier urbanization date is associated with higher per capita income today.