Edward Glaeser is a professor of economics at Harvard University. He has written extensively on the economies of cities (agglomeration economies) and is a strong advocate for appreciating the many positive contributions of cities to the global economy and culture. He writes of cities today:
“Agglomeration economies are the benefits that come when firms and people locate near one another together in cities and industrial clusters. These benefits all ultimately come from transport cost savings: the only real difference between a nearby firm and one across the continent is that it is easier to connect with a neighbor. Of course, transportation costs must be interpreted broadly, and they include the difficulties in exchanging goods, people, and ideas. The connection between agglomeration economies and transport costs would seem to suggest that agglomerations should become less important, as transportation and communication costs have fallen. Yet, a central paradox of our time is that in cities, industrial agglomerations remain remarkably vital, despite ever easier movement of goods and knowledge across space.”
At different times in modern history, various intellectuals, politicians, economists, and cultural figures have suggested the imminent demise of the city due to crime, the lure of the suburbs, the internet, pandemics, and more. Glaeser’s articulation of the key elements of urban economies also suggests that there are forces that would lead to either the end or the decline of cities worldwide. However, urban populations continue to grow in many regions, and in every region of the world, the majority of the population inevitably moves toward living in urban areas.
Given the statement above and the content presented in this module, answer the following questions and offer the following thoughts:
- Utilitylocation = Income + Amenities – Housing costs and Transportation costs. This equation asserts that the utility of being located in a city is dependent on an individual’s potential for generating income plus the range of amenities offered by the city minus the combined cost of housing and transportation. Choose a city and specify the amenities that you would list as substantial contributors to this equation.
- Offer your thoughts on the following statement: Urban sustainability will provide a much greater range of amenities to urban residents than most cities do today. From an enriched urban biodiversity to resilience from climate change, cities will serve as concentrators of resources and sustainable systems that will enhance the amenities variable in the equation above. Do you agree or disagree? Please provide your rationale
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