DP8119 The Identification of Agglomeration Economies
|Author(s):||Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon|
|Publication Date:||November 2010|
|Keyword(s):||agglomeration economies, instrumental variables, natural experiments, structural estimation|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8119|
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.