From Neighborhoods to Nations

Yannis M. Ioannides is the Max and Herta Neubauer Professor of Economics at Tufts University.

Preface xi Chapter 1 Introduction 1 *1.1 From Urban Externalities to Urban Interactions 2 *1.2 Economies of Cities and New Economic Geography 6 *1.3 Urban Structure and Growth 8 *1.4 Urban Interactions, Politics, andUrban Design 9 *1.5 Moving Forward 9 Chapter 2 Social Interactions: Theory and Empirics 11 *2.1 Introduction 11 *2.2 A Simple Linear Model 14 *2.3 Endogenous Social Structure 22 *2.4 Nonlinear Models 30 *2.5 Why Experimental Data Can Help 38 *2.6 Endogenous Social Structure Revisited: Dynamics 44 *2.7 Econometrics of Social Interactions in Social Networks 53 *2.8 Spatial Econometrics Models as Social Interactions Models 61 *2.9 Social Learning in Urban Settings 64 *2.10 Conclusions 66 *2.11 Highlights of the Literature and Further Study 67 *2.12 Appendix: Basic Facts of Graph and Network Theory for Social Network Modeling 68 *2.13 Appendix: Survey of Micro Data Sources with Rich Contextual Information 71 Chapter 3 Location Decisions of Individuals and Social Interactions 79 *3.1 Introduction 79 *3.2 Aspatial Models of Location with Social Interactions 82 *3.3 An Exact Solution for Hedonic Prices in a Model of Sorting 88 *3.4 A Discrete Location Problem with Endogenous and Contextual Effects 95 *3.5 Endogenous Neighborhood Choice and Contextual Effects in Housing Decisions 97 *3.6 Spatial Clustering and Demographic Characteristics: Schelling's Models 115 *3.7 Hierarchical Models of Community Choice with Social Interactions 126 *3.8 Conclusion 134 *3.9 Appendices 135 Chapter 4 Location Decisions of Firms and Social Interactions 148 *4.1 Introduction 148 *4.2 Models of Location of Firms 150 *4.3 Location of Firms under Uncertainty 153 *4.4 Testing for Agglomeration 158 *4.5 Other Approaches to Studying Agglomeration Economies 169 *4.6 Empirical Evidence on Urbanization (Jacobs) Externalities: A Look from the Total Factor Productivity of Firms 180 *4.7 The Role of Inputs and Geography in Location Decisions of Firms 183 *4.8 Economic Geography Models for Firms' Location Decisions 188 *4.9 Risk Pooling by Firms in the Urban Economy 192 *4.10 Conclusion 198 Chapter 5 Social Interactions and Urban Spatial Equilibrium 200 *5.1 Introduction 200 *5.2 Urban Spatial Equilibrium with Social Interactions 206 *5.3 Location Decisions of Firms in Urban Space 212 *5.4 Monocentric versus Polycentric Models of the Urban Economy 217 *5.5 The Lucas-Rossi-Hansberg Models ofUrban Spatial Structure with Productive Externalities 219 *5.6 Neighborhood Effects and theGeometry of the Canonical Urban Model 226 *5.7 Transmission of Job-Related Information and Urban Equilibrium 234 *5.8 Choice of Job Matching and Spatial Structure 240 *5.9 Conclusions 246 Chapter 6 Social Interactions and Human Capital Spillovers 248 *6.1 Introduction 248 *6.2 Spatial Equilibrium 251 *6.3 Spatial Interactions and Spatial Economic Activity 253 *6.4 The Urban Wage Premium and Spatial Equilibrium 259 *6.5 Social Interactions and Human Capital Accumulation 268 *6.6 Social Interactions in Synthetic Neighborhoods 284 *6.7 Conclusions 286 *6.8 Guide to the Literature: Chapters 3-6 287 Chapter 7 Specialization, Intercity Trade, and Urban Structure 292 *7.1 Introduction 292 *7.2 Empirical Evidence on Urban Specialization and Diversification 294 *7.3 Simple Economics of Urban Specialization 297 *7.4 Specialization, Diversification, and Intercity Trade 306 *7.5 Equilibrium Urban Structure with Intercity Trade 318 *7.6 Richer Urban Structures 323 *7.7 The Role of Geography 326 *7.8 Labor Market Frictions in a System of Cities 330 *7.9 Modeling Lessons from the Empirics of Urban Specialization and Diversification 344 *7.10 Summary and Conclusions 346 Chapter 8 Empirics of the Urban Structure and Its Evolution 349 *8.1 Introduction 349 *8.2 Zipf's Law for Cities 350 *8.3 The Duranton Model of Endogenous City Formation 364 *8.4 The Hierarchy Principle 368 *8.5 Cities versus Metropolitan Areas versus Urban Places versus Densities versus Clusters 371 *8.6 Evolving Urban Structures with General Intradistribution Dependence 379 *8.7 Geography and Spatial Clustering 390 *8.8 Studies of Urban Structure Based on "Quasi-Natural Experiments" 393 *8.9 Global Aspects of City Size Distribution and Its Evolution 395 *8.10 Conclusion 396 Chapter 9 Intercity Trade and Long-Run Urban Growth 398 *9.1 Introduction 398 *9.2 Growth of Isolated Cities 401 *9.3 A Ventura-Type Model of Intercity Trade and Economic Growth 409 *9.4 Growth in an Economy of AutarkicCities 412 *9.5 Economic Integration, Urban Specialization, and Growth 420 *9.6 The Rossi-Hansberg-Wright Model of Urban Structure and Its Evolution 429 *9.7 Empirical Aspects of Urban Structure and Long-Run Urban Growth 434 *9.8 Sequential Urban Growth and Decay 440 *9.9 "Space: The Final Frontier?" 444 *9.10 Why Does a City Grow? 447 *9.11 Guide to the Literature for Chapters 7-9 448 Chapter 10 Urban Magic: Concluding Remarks 451 *10.1 Networks, Urban Infrastructure, and Social Interactions 452 *10.2 Graphs and the City 454 Notes 457 Bibliography 483 Index 517