Cities, a very very brief introduction

Why should we care about cities?

Why should we care about cities?

Aristotle said…

“While coming into being for the sake of living, the city exists for the sake of living well.”

The most overused figure (Nations 2009)…

In 2009 for the first time in history 2009 more than 50% of the population lived within cities

… but still true!

Why should we care about cities?

Source of:

  • economic growth - places of trade, employment and productivity

  • the knowledge centre - innovation and technology

  • but also - pandemics (!)

Why should we care about cities?

  • Strong links historically between (McCann and Acs 2011):
    • Globalisation
    • Urbanisation
    • Industrialisation

Why should we care about cities?

  • Tremendous growth
  • Not the same everywhere

https://data.worldbank.org/share/widget?indicators=SP.URB.TOTL.IN.ZS&view=map

Why should we care about cities?

Even the definition of what is ‘urban’ can be different

Hanberry (2022)

Why should we care about cities?

Urban analytics and city science

  • Understand cities and how they change
  • Use critically and effectively urban data
  • Understand and master methodological tools
  • Support urban policy making

Different terms

  • Academics love inventing new terms
  • Urban science, city science, urban analytics, urban geography, geographic data science, urban data science, complexity science, TheNextBigThing
  • Have a look: Batty (2019)

Brief description of evolution of cities

Brief description of evolution of cities

  1. 8000 BCE - first settled agriculture
  2. by 4000 BCE we have notes of cities existing in Sumeria
  3. low level of urbanization up until Industrial Revolution (2%-3% of urbanization)
  4. 18th-19th century - emergence of cities as we know them (25% urbanization in 1950)
  5. 20th-21th century - Knowledge Revolution (58% urbanization in 2022)

Why do cities exist?

Why do cities exist?

  • An economist’s answer: to economise!
  • Because of economies of scale and agglomeration economies

Scale economies

  • AKA increasing returns to scale, or
  • AKA economies of scale
  • Business enterprises become more efficient at large scales of operation
  • More output per unit of input than at smaller scales
  • ➔ larger enterprises
  • Within firms

Scale economies

Scale economies

Increasing returns to scale

  • double ALL the inputs ➔
  • more than double output

Scale economies

Scale economies

Constant returns to scale:

  • double ALL the inputs ➔
  • double output

Scale economies

Scale economies

Decreasing returns to scale

  • double ALL the inputs ➔
  • less than double output

Scale economies

Scale economies

How do they affect space?

  • Clustering of workers near factories
  • Clustering of services for workers near factories
  • The company town example
  • Illustrative

Agglomeration economies

  • AKA external economies of scale
  • External to the firm
  • Very important for cities
  • Two types:
    • Localisation economies AKA Marshallian externalities
    • Urbanisation economies AKA Jacobian externalities

Agglomeration economies

## Agglomeration economies

Two main types

  • Localization economies

  • Urbanization economies

Localization Economies

  • Within a group of firms of the same industry
  • Clustered together at the same place
  • Why?
    • Information exchange
    • Labour mobility
    • Specialist services

Examples: Silicon Valley (micro-electronics), The City of London (finance), Detroit and Michigan (automobile), Seattle (aerospace), etc.

Localization Economies

Urbanization economies

  • Firms across different sectors
  • Clustered together at the same place (Jane Jacobs 1961)
  • A city
  • Why?
    • Support services to firms experiencing internal and localization economies
    • Clustering
    • Increased local factor prices
    • Economies of scale

Agglomeration economies

  • Diversity vs. specialization
  • Internal economies of scale (firm specific)
  • Localization economies (industry specific)
  • Urbanization economies (city specific)

The sources of agglomeration

  1. Knowledge spillovers (Marshall 1890)
  • Interactions between employees of different firms
  • Proximity
  • Tacit knowledge
  • Mutual trading of information

The sources of agglomeration economies

  1. Non-traded local inputs
  • Efficient provision of specialist inputs
  • Infrastructure

The sources of agglomeration economies

  1. Local skilled labour pool
  • Sufficient quantity of labour to respond to market changes
  • Specialised labour / cost of training

The sources of agglomeration economies

  • Processes of learning, sharing and matching (Duranton and Puga 2004)
  • Clustering:
    • Interaction
    • Dynamic
    • ➔ reduces knowledge and information transaction cost
  • Higher profitability for firms within the cluster than those outside the cluster

Agglomeration economies: pecuniary vs. technological

  • Pecuniary ➔ input cost reduction
  • make inputs cheaper in larger cities
  • Technological ➔ raise productivity
  • make inputs more productive in larger cities

Based on Brueckner (2011)

Agglomeration economies: a citique

Bounded rationality (Simon 1955, 1966)

  • Information about space and location in limited
  • Relocation issues, the ability of a rational decision is limited
  • Relocation cost

Why cities do exist?

To economise!

In other words, collocation of people and firms increases efficiency.

Cities as complex system

Heterogeneity Differences in information, profession, culture, race, ethnicity, and economic status
Interconnectivity Interdependence between people, organizations, and infrastructure in networks
Scaling Self-similar economies of scale per capita in material infrastructure and increasing returns to socioeconomic activity
Circular causality Interdependence dynamics between socioeconomic activities, institutions, and services
Evolution Open-ended change supported by new information, investment, and collective action

Source: Bettencourt (2021)

Cities as complex system: scale

Urban models: looking into cities

The Von Thünen model (The isolated state in 1826)

  • Basic idea: Agricultural land uses follow predictable patterns around cities, which are the markets for the farm goods
  • Goods with greatest demand and having the highest transport costs should be produced closest to the city

Urban models: looking into cities

Source: Coe, Kelly, and Yeung (2019)

Urban models: looking into cities

The Burgess model

  • Created by E.W. Burgess in 1925
  • Developed in rings, reflecting waves of immigrants
  • Used Chicago as his model
  • Most European cities developed this way (pre-automobile)

Urban models: looking into cities

The Burgess model

Source: bbc.co.uk

Urban models: systems of cities

Why aren’t we all clustered in a huge city?

  • Diseconomies of scale

  • AKA Decreasing returns to scale

    Source: Bettencourt (2021)

Urban models: systems of cities

Central place theory

Source: Wood and Roberts (2012) adapted from Christaller (1966)

Urban models: systems of cities

Central place theory

  • Walter Christaller Christaller and Brush (1966)
  • Spatial distribution of cities and towns in Southern Germany
  • Inductive instead of deductive
  • Hierarchy of 3 different goods (3, 2, 1), 3 different market areas and 3 different levels of urban centres (Village, Town and City)
  • Assumptions: homogeneous land and equal
  • Transport possibilities in all directions

Summary

  • Urban structure is not random
  • Multiple scales: individual, neighbourhoods, cities, urban networks
  • Cities are complex adaptive systems

References

Batty, Michael. 2019. “Urban Analytics Defined.” Environment and Planning B: Urban Analytics and City Science 46 (3): 403–5. https://doi.org/10.1177/2399808319839494.
Bettencourt, Luı́s MA. 2021. “Introduction to Urban Science: Evidence and Theory of Cities as Complex Systems.”
Brueckner, Jan K. 2011. Lectures on Urban Economics. MIT press.
Christaller, Walter. 1966. Central Places in Southern Germany. Vol. 10. Prentice-Hall.
Christaller, Walter, and John E. Brush. 1966. “Walter Christaller. Central Places in Southern Germany.” The Annals of the American Academy of Political and Social Science 368 (1): 187–87. https://doi.org/10.1177/000271626636800132.
Coe, Neil M, Philip F Kelly, and Henry WC Yeung. 2019. Economic Geography: A Contemporary Introduction. John Wiley & Sons.
Duranton, Gilles, and Diego Puga. 2004. “Micro-Foundations of Urban Agglomeration Economies.” Handbook of Regional and Urban Economics 4: 2063–2117.
Hanberry, Brice B. 2022. “Imposing Consistent Global Definitions of Urban Populations with Gridded Population Density Models: Irreconcilable Differences at the National Scale.” Landscape and Urban Planning 226: 104493. https://doi.org/https://doi.org/10.1016/j.landurbplan.2022.104493.
Jane Jacobs. 1961. The Death and Life of Great American Cities. Vintage Books.
Marshall, Alfred. 1890. “Principles of Economics: An Introductory Volume.” The Macmillan Press Ltd.
McCann, Philip, and Zoltan J Acs. 2011. “Globalization: Countries, Cities and Multinationals.” Regional Studies 45 (1): 17–32.
Nations, United. 2009. Urban and Rural Areas. New Yorl: United Nations.
Simon, Herbert A. 1955. “A Behavioral Model of Rational Choice.” The Quarterly Journal of Economics 69 (1): 99–118.
———. 1966. “Theories of Decision-Making in Economics and Behavioural Science.” In Surveys of Economic Theory, 1–28. Springer.
Wood, Andrew, and Susan Roberts. 2012. Economic Geography: Places, Networks and Flows. Routledge.