Megacity growth in the developing world is fueled by a desire to access their large local labor markets. Growing megacities suffer from high levels of traffic congestion and pollution, which degrade local quality of life. Transportation technology that allows individuals to access the megacity without living within its boundaries offers potentially large social benefits, because individuals can enjoy the benefits of urban agglomeration while not paying megacity real estate rents and suffering from the city’s social costs. This paper presents evidence supporting the claim that China’s bullet trains are playing this role. The bullet train is regarded as one of the most significant technological breakthroughs in passenger transportation developed in the second half of the 20th century. Starting in 2007, China has introduced several new bullet trains that connect megacities such as Beijing, Shanghai, and Guangzhou with nearby cities. Through facilitating market integration, bullet trains will stimulate the development of second- and third-tier cities. By offering households and firms a larger menu of location alternatives, bullet trains help to protect the quality of life of the growing urban population. We document that this transport innovation is associated with rising real estate prices in the nearby secondary cities.

https://www.pnas.org/content/pnas/110/14/E1248.full.pdf

China’s bullet trains facilitate market integration and mitigate the cost of megacity growth

Political scientists often turn to natural experiments to draw causal inferences with observational data. Recently, the regression discontinuity design (RD) has become a popular type of natural experiment due to its relatively weak assumptions. We study a special type of regression discontinuity design where the discontinuity in treatment assignment is geographic. In this design, which we call the Geographic Regression Discontinuity (GRD) design, a geographic or administrative boundary splits units into treated and control areas, and analysts make the case that the division into treated and control areas occurs in an as-if random fashion. We show how this design is equivalent to a standard RD with two running variables, but we also clarify several methodological differences that arise in geographical contexts. We also offer a method for estimation of geographically located treatment effects that can also be used to validate the identification assumptions using observable pretreatment characteristics. We illustrate our methodological framework with a re-examination of the effects of political advertisements on voter turnout during a presidential campaign, exploiting the exogenous variation in the volume of presidential ads that is created by media market boundaries.

Geographic Boundaries as Regression Discontinuities

colonial Benin, we investigate the effect of education on living standards, occupation, and political participation. Since both school locations and student cohorts were selected with very little information, treatment and control groups are balanced on observables. We can therefore estimate the effect of education by comparing the treated to the untreated living in the same village, as well as those living in villages where no schools were set up. We find a significant positive treatment effect of education for the first generation of students, as well as their descendants: they have higher living standards, are less likely to be farmers, and are more likely to be politically active. We find large village-level externalities—descendants of the uneducated in villages with schools do better than those in control villages. We also find extended family externalities—nephews and nieces directly benefit from their uncle’s education—and show that this represents a ‘‘family tax,’’ as educated uncles transfer resources to the extended family.

/pdf/education-and-human-capital-externalities-evidence-from-4i5alzg9o3.pdf

Education and Human Capital Externalities: Evidence from Colonial Benin

Ever since the seminal work of Stigler (1962), economists have recognized that information in markets is costly to acquire and can lead to “search frictions”. The remarkable growth in online search has substantially lowered the cost of information acquisition. Despite this, there is little evidence concerning the extent to which this has altered the search process and raised overall matching efficiency. To address this issue, we analyze the expansion of the website "Craigslist", which allows users to post job ads and apartment and housing rental ads at virtually no cost. Exploiting the sharp geographic and temporal variation in the availability of online search, induced by Craigslist, we produce three key findings: Craigslist significantly lowered classified job advertisements in newspapers, caused a significant reduction in the apartment and housing rental vacancy rate, and had no effect on the unemployment rate.

/pdf/does-online-search-crowd-out-traditional-search-and-improve-om73xj4ifu.pdf

Does Online Search Crowd Out Traditional Search and Improve Matching Efficiency? Evidence from Craigslist

This chapter reviews the different pathways which cities are following to become more accessible. By identifying the close link between transport and urban form based on global evidence, it highlights the direct and indirect costs of choices made. It then presents the tipping points which can allow to proceed from sprawling urban development and conventional motorised transport to more compact cities characterised by innovative mobility choices shaped around shared and public transport. The examples used are based on cities worldwide to illustrate emerging trends from both developed and developing countries. Therefore, the recommendations are valuable for a range of stakeholders including local and national policy makers, academics and vehicle manufacturers.

/pdf/accessibility-in-cities-transport-and-urban-form-2x1bs2v2dn.pdf

Accessibility in cities: transport and urban form

Developments in methodologies, agglomeration, and a range of applied issues have characterized recent advances in regional and urban studies. Volume 5 concentrates on these developments while treating traditional subjects such as housing, the costs and benefits of cities, and policy issues beyond regional inequalities. Contributors make a habit of combining theory and empirics in each chapter, guiding research amid a trend in applied economics towards structural and quasi-experimental approaches. Clearly distinguished from the New Economic Geography covered by Volume 4, these articles feature an international approach that positions recent advances within the discipline of economics and society at large. * Editors are recognized as leaders and can attract an international list of contributors* Regional and urban studies interest economists in many subdisciplines, such as labor, development, and public economics* Table of contents combines theoretical and applied subjects, ensuring broad appeal to readers

C. William Strange

Papers

Handbook of regional and urban economics