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Emily Hamilton

Emily Hamilton

  • Joined: May 21, 2025
  • Articles: 154

Urbanization and GDP

I am no macroeconomist; however, I think there are some important dots to connect between cities and economic growth. The Gated City by Ryan Avent, (discussed more in depth here), explores this thesis and offers a nice overview of the research that links population density and productivity. He cites Ed Glaeser and others who see a strong correlation between the two. Glaeser finds that with a 50 percent increase in population density, productivity increases by 4 percent. Additionally, I find Geoffrey West’s work (not cited by Avent) particularly intriguing. West is a former physicist who has studied the correlation between city size and all sorts of variables from the number of gas stations to the number of bank deposits per year. He’s found that every time a city doubles in size, worker productivity increases by 15 percent. The distinction between West and many others who study this issue is that he focuses on a city’s total population rather than its population density. Increasing worker productivity is the holy grail of macroeconomics. As worker productivity grows, it raises our wages and standard of living. This is what lifts poor countries out of poverty and ensures that future generations will enjoy a higher standard of living than we do today. Some of the factors that economists widely agree contribute to higher growth rates include education, property rights, and rule of law. Perhaps urbanization should be added to the list too. I won’t weigh in here on whether the variable that influences productivity is population size or population denisty; maybe they both do. In the context of land use policy, I would argue that it doesn’t matter which variable we look at. By limiting development, land use restrictions typically lead cities to be both less dense and of smaller populations. This applies equally to traditional land use […]

e. e. cummings the urbanist

A post of Stephen’s from a year ago got a few hits today. I reread it and recalled a poem I studied in high school by e. e. cummings: plato told him: he couldn't believe it(jesus told him;he wouldn't believe it)lao tsze certainly told him,and general (yes mam) sherman ; and even (believe it or not) you told him:i told him;we told him (he didn't believe it,no sir) it took a nipponized bit of the old sixth avenue el;in the top of his head: to tell him I actually have no idea what this poem is about, but I’m going to suggest that perhaps e. e. cummings did not support the destruction of New York’s private mass transit to meet government ends.

Book Review of The Heights: Anatomy of a Skyscraper

I’m reviewing The Heights: Anatomy of the Skyscraper by Kate Ascher as part of a TLC Book Tour. Other bloggers are also reviewing the book, and you can find links to their reviews here. I received a complimentary copy of the book, and I’d like to send it to a reader if anyone is interested in reading it. If you’d like it, just comment saying so by Monday, December 5th. If multiple readers would like it, I’ll pick one at random. _______________________________ The Heights reads like a textbook for Skyscrapers 101. It’s full of interesting skyscraper facts along with diagrams and timelines. I learned a lot from the book, having no background in architecture or engineering. For someone who has studied these subjects though, I imagine that this book would be too elementary. However for me, it offered a useful overview of the history and science of skyscrapers. Ascher details the process of planning, constructing, and owning skyscrapers, from the details of different types of foundations to building maintenance. She explains some of the challenges that skyscrapers present that I might not have thought about. For example, buildings with unusual designs that do not have straight sides must be designed with mechanisms for reaching the windows for cleaning and maintenance. She also explores skyscraper financing. I was surprised to learn that the bulk of the cost of owning a skyscraper comes not from construction, but rather from cleaning and maintenance over the life of the building: Although the annual cost of maintenance pales in comparison to the cost of constructing a building, over the life of a building — which can be upward of 100 years–it is much more significant. Holding aside capital replacement and reinvestment, the cost of the initial structure itself represents only about 5 to 10 percent of the total cost of owning […]

Cities and the Market Process: Part 3

This series looks at some of the ways that people organize themselves to live alongside each other in cities. Part 1 looks at inherent problems with top-down planning, and Part 2 looks at the costs of local governments sanctioning collective choice. From this negative start, I’d like to turn to some of the advantages that make humans well-adapted to living in the urban environment, starting with some of Adam Smith’s insight in The Theory of Moral Sentiments. Economists are often criticized, sometimes rightly so, for viewing people as perfectly rational and narrowly self-interested. Of course we are not. We all have unique motivators and preferences, which is what allows for the division of labor that we see in cities. One of the most important motivations, or “moral sentiments,” that we have comes in our desire for others to fare well and be happy. As Smith puts it: Upon these two different efforts, upon that of the spectator to enter into the sentiments of the person principally concerned, and upon that of the person principally concerned, to bring down his emotions to what the spectator can go along with, are founded two different sets of virtues. The soft, the gentle, the amiable virtues, the virtues of candid condescension and indulgent humanity, are founded upon the one: the great, the awful and respectable, the virtues of self-denial, of self-government, of that command of the passions which subjects all the movements of our nature to what our own dignity and honour, and the propriety of our own conduct require, take their origin from the other. This innate desire that most people have to relate to and be respected by those in their community makes people well-suited to city living. As Smith describes it, we generally seek approval from the “man within the breast,” […]

TGIF Links

1. A reader from Vancouver wrote in to let Stephen and me know about a proposed policy to tax foreign investors at a higher rate than local property owners. Support for this policy is growing among residents, and with a mayoral election this Saturday, some are hoping to get candidates to endorse the policy now. Of course the higher tax rate would be done in the name of affordable housing for Vancouver natives. Hmm, with this one I’d say that the road to hell is paved with questionable intentions. 2. In other Vancouver news, recently upzoned parcels have sold for three times their previous value. 3. Two NYC taxi medallions sold for over $1 million each this week. On Marketplace, David Yassky, chairman of the city’s Taxi and Limousine Commission said that he believes the fundamentals are solid in the medallion market. When the supply of your commodity is rigidly fixed, you’re already halfway to strong fundamentals. 4. A University of Connecticut study finds that growth in the number of a city’s parking spots is inversely correlated with population growth rates. 5. Some have questioned whether the abismal state of American infrastructure is a fact or just something that everyone knows and repeats. Gizmodo points out that in the United States we have a road system that built with cheap initial construction but expensive and ongoing maintenance costs. 6. Roberta Brandes Gratz at The Atlantic Cities speculates that Jane Jacobs’ female perspective led her to be able to see the small-scale, bottom-up activities of cities more effectively than men, who tend to look at cities from the macro level. Not sure where this leaves Hayek.

Some Belated Thoughts on The Gated City

Several bloggers have already provided reviews of The Gated City by Ryan Avent, including Aaron Renn at The Urbanophile, Rob Pitingol at Greater Greater Washington,  and Lloyd Alter at Tree Hugger. I’ve finally had a chance to read it and would thoroughly recommend it. I often support increased density on the grounds that this is what the market wants. To me, that’s still reason enough to support the repeal of many land use regulations, but Avent offers a vision of density that is perhaps more compelling to more people. Because the division of labor is limited by the size of the market, cities offer many amenities that are not supported in less dense places. The diversity of food, art, shopping, sports, and movies is all much greater in cities than in small towns because larger markets allow for more specialization. Of course taste is subjective; many people prefer the quiet of the suburbs to the chaos of the city. However we can see that currently, many people want to move to cities but are unable to by looking at vacancy and rental rates. Avent also points out that cities provide a sort of employment “insurance.” He uses the example of a Vietnamese chef losing his job. If the restaurant where he worked is in a large metropolitan area, he will be able to find another job in a Vietnamese restaurant. On the other hand, if he lives in a small town, he will likely have to seek employment in a more generic restaurant where he won’t  be able to charge a premium for his specialized skills. This is true for jobs in many industries. If I were to lose my job in economics research, I’d much rather be searching for a new job here in DC than in a state with one think tank, for […]

11/11/11 Day Links

1. Several people including Lydia DePillis, Charlie Gardner, and Steve Stofka have discussed the emergent order that we can see in the Occupy settlements. Similarly this video shows a beautiful illustration of the spontaneous urban development at Burning Man. 2. The Atlantic Cities features the work of Boston cartographers at Bostonography. They have produced some very fun and informative visualizations of data on the city. 3. An environmentally friendly house is going up in a DC neighborhood, and it doesn’t “fit in” at all with the surrounding row houses. A commenter at Prince of Petworth said, “Its different, quirky. Its not like they tore down a historic house to build it. I say build more weird houses. In 50 years people will thank you.” Although this house is really ugly, I tend to agree. 4. The New Republic reports that Mitt Romney used to be a supporter of Smart Growth for Massachusetts. Ezra Klein says that Romney has shied away from this issue in the national spotlight since the median voter has a vested interest in sprawl. Anyone think this change means that Romney has seen the error of central planning? Anyone?

Cities and the Tax Code

We spend a lot of time here talking about the local regulations that harm cities, from parking minimums, to height limits to restrictions on mixed-use development. I’ve been thinking recently about another policy that impacts cities at the federal level: the tax code. I bring up this topic not to stoke the political debate on redistribution, but to think about the outcome that results if tax burdens push and pull people out of cities. I’ve often heard libertarian and conservative types say that they prefer suburban or rural living because city residents are more dependent on government services, but is it really true that city dwellers depend on government programs more so than others? City residents clearly pay higher local taxes and receive more local government services, but I would argue that this isn’t as important as federal taxation and spending because local taxes benefit the taxpayers more directly than the wider net of federal redistribution. In Triumph of the Cities, Ed Glaeser points to the mortgage interest tax deduction as an important factor that pulls people to the suburbs by way of home ownership, and I would certainly agree that all federal policies with the goal of promoting home ownership or facilitating easy credit harm cities. Another much-talked-about tax expenditure for ethanol fuel blenders has benefits that fall on drivers, and this is on top of all of the other tax benefits that domestic oil companies receive. Several government programs subsidize those who choose to live in inconvenient places. The USPS delivers many packages for a flat rate fee, while I doubt that FedEx would find this pricing profitable. Similarly, the American Recovery and Reinvestment Act provided funds for expanding broadband to areas of the country that could not otherwise support the service. On the other hand, some federal policies […]

Midweek Links and Business

1. Stephen writes at The Atlantic Cities on Japan’s largely privatized rail system. He points out that free market reforms have benefited both cities and transit there. 2. For readers in the DC area, the Urban Land Institute is holding Capital Markets Interchange in McLean on November 10th. The event will focus on real estate investment in the current climate of political uncertainty. 3. Ryan Avent is on Econtalk this week. I’ve not yet read The Gated City, but I hope to read it this week and offer my thoughts on it next week. His conversation with Russ Roberts was great, and I was excited to hear that they covered some of the themes of yesterday’s post on opportunities for lobbying planning departments and city councils for land use privileges. 4. I am shocked, shocked by the increase in the estimated cost of California’s HSR. Check out The OC Register’s account of yesterday’s new developments compared to CAHSR blog’s for an interesting contrast in perspectives. 5. Four readers commented and two emailed me saying that they would be interested in my copy of The Instant City (reviewed last week). At random, I selected the second email that I received, so I will be sending the book to that reader shortly.

Cities and the Market Process: Part 2

In the first post of this little series, I addressed the problems of top down land use regulation through the lens of Austrian economics. Because cities contain public space and infrastructure that is used by many residents and cannot be bought and sold in the way that many goods can be, Alon Levy suggests turning to collective choice to solve these problems. I will agree that collective choice, or its close cousin communal property rights can be employed well in cities. For example, business improvement districts can work together to undertake projects that would not be worthwhile for any business to take individually, benefitting themselves and their customers in the process. Similarly, these voluntary and emergent organizations can emerge among homeowners or neighborhoods, circumventing some of the coordination problems involved within communities. In a future post, I will go into further detail about the benefits of these types of organizations, whether they’re formal or informal. But now, I want to point out the problems of collective choice when carried out through legislation or land use regulation. As Alon points out, collective choice is inherently biased toward favoring a city’s or neighborhood’s current residents, against potential future residents. This makes policies created through collective choice inherently anti-density and anti-growth. It also means that cities come with a built-in vested interest that wants to protect their property. When planning departments allow this group to protect their interest through the political process, the market process is stifled because entrepreneurs cannot take advantage of available profit opportunities to increase urban density. Furthermore, collective choice leads to many unholy alliances, such as NIMBYs and historic preservationists, NIMBYs and environmentalists who want to protect open space, NIMBYs and those opposed to new transit projects, etc. In other words, collective choice leads to many of the results that urbanists criticize. […]

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