Virtual special issue on urban development

ABSTRACT

This virtual special issue of Spatial Economic Analysis marks the keynote lecture at the 47th Annual Conference of the Regional Science Association International – British and Irish Section in Harrogate by Professor Bob Stimson of the University of Queensland, Australia. With over half the world’s population now living in urban areas, which according to the United Nations is expected rise to 66% by 2050, the theme of Professor Stimson’s lecture – urban development – is of critical importance. Cities provide significant opportunities for economic growth and development as long as urban design models are not only effective but also sustainable, inclusive and equitable. This virtual special issue draws together 10 articles from earlier issues of the journal, which inform a successful urban design agenda.

KEYWORDS:

• urban economics
• spatial modelling
• urban planning
• cities

JEL:

• C00
• R00

Now in its 12th year, Spatial Economic Analysis has become an agenda-setting journal for regional science, including through important contributions to urban analysis. The papers in this virtual special issue highlight the complexity of research and policy as a result of spatial interdependence in urban settings; the important contribution that robust analysis can make to urban and regional policy and planning; and the danger of simplistic approaches to the relationship between amenity provision and economic development or quality of life in urban areas.

Hewings and Parr (2007) explore the extent and sources of spatial interdependence in a metropolitan region, in this case the Chicago area. They assert that suburban areas have detached themselves from central cities, sometimes referred to as the ‘edge-city’ effect. The authors find that a substantial proportion of production in ex-urban zones derives from activity generated in other zones. This highlights the complexity of metropolitan regions in their degree of interdependence at lower spatial scales.

This complexity is also clearly highlighted by Royuela (2011), who is concerned with quality of life in an urban setting and challenges the idea that quality decreases with population growth. The author argues that the provision of some amenities and services that enhance quality of life require a demand threshold that is met only with larger populations. Using data on amenities, quality of life and population for municipalities in Barcelona from 1991 to 2004, the author finds an interesting spatial interaction between neighbouring municipalities. He finds that population growth is positively associated with quality-of-life growth in neighbouring municipalities, rather than within the same municipality. Likewise, quality-of-life growth is positively associated with neighbouring municipalities’ quality of life and population growth. The results suggest that policies designed to enhance quality of life must consider the spatial interactions between locations.

Analysis at lower spatial scales can be insightful, as seen in Bhattacharjee, Castro, and Marques (2012), who provide an innovative methodological approach to understanding urban housing markets. The authors explore spatial dependence in housing markets because of spillovers between as well as within sub-markets. Sub-markets are based on categorization within a defined spatial scale, using administrative boundaries and social and cultural characteristics. Their work contributes both empirically, through a rigorous and novel method, and from a policy perspective, through the insights provided on spatial dependence in housing markets.

Dorfman, Partridge and Galloway (2011) challenge some of the cherished ideas of policy-makers, particularly for rural areas. Using a dataset of 2936 US counties, the authors find that while natural amenities do seem to attract high-tech jobs in some circumstances, there is a prerequisite baseline of cultural and business amenities in metropolitan areas before natural amenities matter. Natural amenities in rural and metropolitan areas matter less than city-specific attributes, though the authors identify what they call ‘micropolitan’ counties, where natural amenities have significant effects on attracting high-tech jobs. They also find no evidence that clusters have a positive impact on economic growth, suggesting that concentrations of sectors (measured by sectoral employment) are negatively associated with subsequent local industry growth. This paper provides little comfort for rural policy-makers in search of a panacea for attracting high-tech workers to their regions.

The paper by Karlsson (2011) will also interest rural and peripheral region policy-makers. The author presents an interesting perspective on the spatial impact of the fallout from the recession in Iceland. The country experienced a dramatic rise in fuel costs brought about by a rise in oil prices globally and currency depreciation. Iceland’s roads are described as primitive, with the terrain and climate resulting in poor driving conditions. Infrastructural improvements, such as new roads, tunnels and bridges, in the decades leading up to the recession means that travel distances are treated by the author as time varying and identifiable in a fixed-effects panel estimation. The author asserts that as ‘distances’ between urban business districts and rural localities decline due to infrastructure improvements, commuting becomes less costly and land values in commuting areas increase. The rise in fuel prices has reduced the ‘profitability’ of commuting and so housing prices decrease more at the edges of conurbations than in the centre.

Robust empirical research is critical for evidence-based policy-making. An illustration of this is Törmä (2008), who provides an interesting example of how policy interventions can and should be explored using robust empirical methods. Focusing on the town of Lapua in South Ostrobothnia, Finland, the author assesses the effects of large infrastructural projects using a multi-sector, interregional computable general equilibrium (CGE) model. While being aware of the limitations of CGE models, the paper has clear and relevant implications for policy-makers concerned with helping regions experiencing population loss and high unemployment.

In a paper that measures urban sprawl, Gómez-Antonio, Hortas-Rico and Li (2016) present a salutary lesson for researchers in spatial economic analysis on the importance of model selection. Thanks to data innovations, the authors are able to measure urban sprawl as the proportion of open space in the square kilometre surrounding each average residential development. They use aerial photography, satellite imaging and geographic information system (GIS) techniques. Their model specification and estimation produces varied relative importance of variables in explaining urban expansion. Their choice of estimation model highlights the tension between theory and practice and the importance for researchers to be conscious of model selection and specification.

Related to the idea of cities’ expansion and the implications for city structure and planning, Guy (2013) explores the relative preferences of shoppers to drive to a shop compared with walking to a local store. Urban planners frequently extol the virtues of ‘walkable shops’ as a positive feature of city living, so this paper makes a valuable contribution to our understanding of the demand for such shops. By simplifying the choice to two options (walkable and car-oriented shops) and the consumer to two categories (drivers and non-drivers), the analysis concludes with a high-priced equilibrium for degraded local retail services. The paper sheds a light on critical issues for urban design and development in a car age, including appropriate policies to enhance city centres, addressing the environmental effects of car use and the distributional impacts of the demise of walkable shops.

Following Guy (2013), Öner (2017) investigates whether consumers’ access to retail units in municipalities and/or wider regions in Sweden is relevant to the municipalities’ attractiveness, where attractiveness is proxied by investment in housing in a municipality. She concludes that even though such a relationship is present for urban municipalities, this is not the case for rural ones. The paper contributes to the existing literature on retail geography by examining the role of consumption possibilities in enhancing place attractiveness, a relationship which is often neglected in debates on local development and growth. It convincingly argues that the function of the retail sector extends beyond a simple supply-and-demand schedule. Finally, it produces a new measure of ‘accessibility to shops’ based on the ideas behind Tobin’s Q.

Spatial Economic Analysis has been at the forefront of debates on appropriate spatial econometric techniques. González-Val and Olmo (2015) use data from 1173 US cities each with over 25,000 inhabitants to contribute to our understanding of the sources of city growth. Their data include urban, climatological, locational and economic indicators, and their estimations seek to assess the extent to which growth is explained by increasing returns to scale, locational fundamentals or random events. In a contribution to empirical studies of cross-sectional growth across cities, they include a spatial lag term to capture the spillover effects of shocks in one city on a neighbouring city. They provide evidence that the growth of cities can be attributed to more than just chance, which is inconsistent with the predictions of Gibrat’s law.

All in all, the collection of papers in this virtual special issue demonstrate not only the breadth of issues surrounding questions of urban development and city growth but also the importance of deploying robust methods, models and data for informing policy on these issues. This reflects the approach taken in the wider literature published in this journal over the last decade. The virtual special issue can be accessed at http://bit.ly/rsea-urban-dev.

ORCID

Declan Jordan http://orcid.org/0000-0002-2446-0111