Externalities In Cities Research Articles

Comparing paratransit in seven major African cities: An accessibility and network analysis

Accessibility to transit, together with other important system characteristics such as network coverage and frequency, is a crucial driver of modal choice for urban commuting. In turn, commuting is a major driver of energy consumption and of socio-environmental externalities in cities. So far, few quantitative and comparative assessments of paratransit in cities of Africa have been carried out due to data scarcity and the prevalence of informal services. Here we leverage the recent release of General Transit Feed Specification (GTFS) data to produce comparative metrics of accessibility, network, and service quality of paratransit in seven major cities in sub-Saharan Africa (Abidjan, Accra, Addis Ababa, Freetown, Harare, Kampala, Nairobi). Our results allow for a first-order assessment and comparison of different crucial paratransit characteristics in these cities, shedding light on transport inequality and urban segregation dynamics. The analysis and metrics produced can support transport systems planners in major cities of low-income countries. Further research should focus on approaches for overcoming the residual data limitations and expand the quantitative understanding of paratransit.

Risking multi-billion decisions on underground railways: Land value capture, differential rent and financialization in London and Hong Kong

Rapid urbanization has brought the needs to minimize negative transport externalities in cities to the forefront. The development of metros is a response to urban sustainability challenges, but the construction of underground infrastructure often requires massive excavation and long construction time, disrupts the economy and people’s everyday living, and is highly capital intensive. As such, these multi-billion-dollar investment decisions require political vision and determination, careful traffic analysis, and the ability to raise sufficient funds to cover not only capital construction costs but also future operations and depreciation. Underground infrastructure projects must, therefore, balance the engineering aspects of a proposed project with the development of a resilient and sustainable business model. This paper is the first to develop a comparative longitudinal analysis of the finance and funding models of two underground systems (London Underground and Hong Kong’s Mass Transit Railway) with a focus on the development of a conceptual framework for understanding land value capture (LVC) based on differential rents and financialization. The focus is on exploring the supply-side aspects of underground transport infrastructure including finance or capital investment and the relationship with funding or revenue streams and the creation of financially sustainable business models.

Urban infrastructure financing in India: applying the benefit and earmarking principles of taxation

Cities in developing countries, including India, are the engines of economic growth and structural transformation due to their agglomeration, knowledge and networking externalities. Yet, they suffer from a serious mismatch between their functions and finances. As a result, they have been consistently neglecting core urban public facilities, critically needed for sustaining growth. This is puzzling as externalities in cities create windfall benefits to both immobile and mobile factors. Surprisingly, there is no discussion on benefit taxation, emphasised by Wicksell (in: Musgrave, Peacock (eds) Classics in the theory of public finance, Macmillan, London, 1896) and Lindahl (The justness of taxation, University of Lund, Lund, 1919), as a strategy of financing urban infrastructure. This paper suggests combining the golden rules of local public finance, principles of benefit taxation, value capture financing and earmarking, borrowing, tax increment financing and tax-sharing in the spirit of cooperative federalism to address the needs of planned urban development in India. Our conclusions apply to other developing countries as well.

Cities and Agglomeration Externalities

Cities are home to agglomeration externalities, which, interacting with knowledge externalities, drive economic growth during structural transformation of nations. Yet policy-makers in several developing countries in the past seemed to have had an anti-urban bias. This is primarily due to the lack of appreciation of externalities of cities and their role in facilitating economic growth and generating resources for economic development, including urban and rural development. Recognizing the critical need of Asian countries to harness the power of agglomeration externalities in cities for growth, this article examines the nature and sources of agglomeration externalities and derives lessons for the formulation of urban public policy in the urbanizing countries of Asia, including India. 城市是集聚外部性的温床，并与知识外部性在国家结构转型过程中推动经济增长发生相互作用。然而，几个发展中国家的政策制定者在过去一段时期里似乎有反城市偏见。这主要是由于缺乏对城市外部性及其在促进经济增长、为经济发展创造资源等方面的认知，包括在城市和农村发展中的作用。鉴于亚洲国家迫切需要利用集聚外部性的力量促进城市增长，本文探讨了集聚外部性的本质和来源，并为包括印度在内的正在经历城镇化的亚洲国家制定城市公共政策总结了经验教训。

Places, Spaces and the Dynamics of Creativity: The Video Game Industry in Montreal

Grandadam D., Cohendet P. and Simon L. Places, spaces and the dynamics of creativity: the video game industry in Montreal, Regional Studies. The aim of this paper is to understand better the dynamics of situated creativity by reconsidering the formation of externalities in cities. What is suggested is that these externalities are not due to the proximity between institutions of the ‘upperground’ or between individuals of the ‘underground’, but rather they emerge from the articulation between places and spaces, which both contribute to fertilize a so-called ‘middleground’. The case of the video game cluster in Montreal in Quebec, Canada, is analysed in order to illustrate this view.

Human capital externalities in cities: evidence from Chinese manufacturing firms

We investigate whether increased geographic concentration of human capital generates positive externalities that benefit firms located in the area. Using a panel of Chinese manufacturing firms, we find a positive and statistically significant relationship between firm productivity and city-level human capital. This result is robust to alternative model specifications and estimation methods used and distinguishable from the effect of industry agglomeration and the spillover effect associated with foreign direct investment. We argue that human capital spillovers do not occur automatically and freely. The intensity of spillovers depends on the benefits and costs accrued to individual workers, which in turn depend on the growth, technological and institutional environments in which the firm operates. We find that the intensity of spillovers is greater in industries where human capital matters more, in larger or more densely populated cities and in more economically vibrant coastal cities. We also find that the intensity of spillovers is generally greater for non-state-owned firms than for state-owned ones and displays an upward trend, which is suggestive of an intensifying impact of market-oriented reforms on human capital externalities.

Traffic externalities in cities: The economics of speed bumps, low emission zones and city bypasses

This paper considers various policy measures that governments can use to reduce traffic externalities in cities. Unlike much of the available literature that emphasized congestion, we focus on measures that reduce pollution, noise and some accident risks. These measures include noise barriers, speed bumps, traffic lights, tolls, emission standards, low emission zones, and bypass capacity to guide traffic around the city center. Using a simple model that distinguishes local and through traffic, we study the optimal use of these instruments by an urban government that cares for the welfare of its residents, and we compare the results with those preferred by a federal authority that also takes into account the welfare of road users from outside the city. Our results include the following. First, compared to the federal social optimum, we show that the city government will over-invest in externality-reducing infrastructure whenever this infrastructure increases the generalized cost of through traffic. We can therefore expect an excessive number of speed bumps and traffic lights, but the right investment in noise barriers. Second, when implementing low emission zones, the urban government will set both the fee for non-compliance and the emission standard at a more stringent level than the federal government. Moreover, at sufficiently high levels of through traffic the urban government will prefer imposing a toll instead of implementing a low emission zone. Third, whatever the tolling instruments in place, the city will always underinvest in bypass capacity. Finally, if it can toll all roads but is forced to invest all bypass toll revenue in the bypass, it will never invest in bypass capacity. Although the paper focuses on non-congestion externalities, most insights also hold in the presence of congestion.

Policies to Reduce Traffic Externalities in Cities

This paper considers various policy measures to reduce traffic externalities in cities, including externality-reducing investments, tolls, emission standards, low emission zones, and bypass capacity to guide traffic around the city center. Using a simple model that distinguishes local and through traffic, we study the optimal use of these instruments by an urban government that cares for the welfare of its inhabitants, and we compare the results with those preferred by a federal authority that takes into account the welfare of all road users. Our results include the following. First, compared to the federal social optimum, we show that the city government will over-invest in externality-reducing infrastructure whenever this infrastructure increases the generalized cost of transit traffic. Second, comparing emission standards and road tolls, we find that cities with a lot of commuters will favor tolls, even though from the federal perspective standards are better. Third, when implementing low emission zones, the urban government will set both the fee for non-compliance and the standard at a higher level than the federal government. Moreover, at sufficiently high transit levels the urban government will prefer imposing a toll instead of implementing a low emission zone. Fourth, if the city can toll the urban infrastructure, it will only invest in bypass capacity when it is allowed to earn extra toll revenues on the bypass that exceed investment costs. Although the paper focuses on non-congestion externalities, most insights also hold in the presence of congestion.

Communication externalities in cities

To identify communication externalities in French cities, we exploit a unique survey recording workplace communication of individual workers. Our hypothesis is that in larger and/or more educated cities, workers should communicate more. In turn, more communication should have a positive effect on wages. By estimating both an earnings and a communication equation, we find evidence of communication externalities. In larger and more educated cities, workers communicate more and in turn this has a positive effect on their wages. Depending on the estimates, we find that 13 to 22% of the effects of a more educated and larger city on wages percolate through this channel.

Human Capital and Externalities in Cities

We combine growth theory with US Census data on individual schooling and wages to estimate the aggregate return to human capital and human capital externalities in cities. Our estimates imply that a one-year increase in average schooling in cities increases their aggregate labor productivity by 8 to 11 percent. We find no evidence for aggregate human capital externalities in cities however, although we use three different approaches. Our main theoretical contribution is to show how human capital externalities can be identified (non-parametrically) even if workers with different levels of human capital are imperfect substitutes in production.

A Meta-analytical Evaluation of Sustainable City Initiatives

The role of the city in environmental management is increasingly coming to the fore. A central element in creating urban environmental sustainability is the adoption of appropriate energy policies, since most environmental externalities in cities are directly or indirectly related to energy use. The current practice demonstrates an overwhelming variety of initiatives and policies, so that the actual success of such strategies in a cross-sectional comparative perspective is hard to evaluate. In this context, this paper offers an application of meta-analysis, as this approach is an interesting analytical contribution towards a better understanding of the critical success factors of urban energy policies. The paper starts with a general overview of the issue of urban sustainability and sets out the importance of energy policies at the urban level. It continues by offering a methodological framework for the assessment of critical factors related to the performance of sustainable energy strategies. Using a database containing information on experiences and expert expectations regarding renewable energy initiatives in 12 European cities spread over 3 countries (Italy, The Netherlands and Greece), we offer a cross-European comparative analysis of the performance of urban renewable energy technologies. This comparative analysis consists of a statistical explanation based on a probit analysis of urban sustainability data and the application of a specific meta-analytical method, called rough set analysis. The paper ends with a concluding section on policy lessons.

Industrial Development in Cities

This paper uses data for eight manufacturing industries in 1970 and 1987 to test for and characterize dynamic production externalities in cities. We find evidence of both MAR externalities, which are associated with past own industry employment concentration, and Jacobs externalities, which are associated with past diversity of local total employment. More specifically, for mature capital goods industries, there is evidence of MAR externalities but none of Jacobs externalities. For new high-tech industries, there is evidence of Jacobs and MAR externalities. These findings are consistent with notions of urban specialization and product cycles: new industries prosper in large, diverse metropolitan areas, but with maturity, production decentralizes to smaller, more specialized cities. For mature industries, there is also a high degree of persistence in individual employment patterns across cities, fostered by both MAR externalities and persistence in regional comparative advantage.