Discussion Paper Details

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Title: Automobiles and urban density

Author(s): Hans R.A. Koster, Victor Mayland Nielsen, Francis Ostermeijer and Jos van Ommeren

Publication Date: May 2020

Keyword(s): Car ownership, urban density and vehicle costs

Programme Area(s): International Trade and Regional Economics

Abstract: How has the rise of the automobile influenced urban areas over the past century? In this paper we investigate the long-run impact of car ownership on urban population density, based on a sample of 232 city observations in 57 countries. Using the presence of a car manufacturer in 1920 as a source of exogenous variation, our IV estimates indicate that car ownership substantially reduces density. A one standard deviation increase in car ownership rates causes a reduction in population density of around 40%. For employment density we find almost identical results. This result has important implications for vehicle taxation, car ownership growth in developing countries, and new transport technologies such as automated vehicles.

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Bibliographic Reference

Koster, H, Nielsen, V, Ostermeijer, F and van Ommeren, J. 2020. 'Automobiles and urban density'. London, Centre for Economic Policy Research.