The identification of agglomeration economies

  • Combes P
  • Duranton G
  • Gobillon L
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Abstract

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.

Author-supplied keywords

  • Agglomeration economies
  • Instrumental variables
  • Natural experiments
  • Structural estimation

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