This is the title of a very nice manuscript by Michael Hollar in the forthcoming issue of the Journal of Regional Science.
His question has been playing on my mind recently as various urbanists have crowed with delight on the decline of suburbs with the housing collapse. (That this decline actually involves human suffering is irrelevant: those homeowners are, of course, merely vacuous yuppies who should have done the morally right thing and had the sense to have money for their housing in the Upper east side and the Hamptons or Cape.)
To anybody that actually thinks about it, Hollar’s finding is pretty obvious, though the question has torn up the research in economic development in the past decades. Strong suburbs do not necessarily mean a weak downtown, nor vice versa, and regions that show evidence of either are economically less productive than places that have both strong suburbs and downtowns. The relationship he models is remarkably symmetric; one isn’t the necessary condition to the other’s growth in terms of exports or product.
The real contribution here is the research design and the model which help us nail down the considerable identification problems here: he develops export price indexes to look for shocks in either of the geographic locales and then measures responses in the paired geography.
It would be interesting to disaggregate the geography a little more than he does.
5 thoughts on “Central Cities and Suburbs: Economic Rivals or Allies?”
“various urbanists have crowed with delight on the decline of suburbs with the housing collapse. (That this decline actually involves human suffering is irrelevant”
Ouch. I don’t know who you’re referring to, but I’m kind of offended by the suggestion that urbanists don’t care about human suffering.
One of the reasons I care about cities that can actually support a balanced transportation system is because I saw what $4 gasoline did to our country in 2008, including the suburban neighborhood where I grew up.
If we wise up and make things a little more resilient in that respect we’ll head off a lot of additional human suffering, since the long-run price trend for gasoline is up.
I wasn’t talking about you if it makes you feel better. I also got shirty with the triumphantalism among some people when GM began to struggle financially and laying off workers. It’s one thing to believe that there are better policies and better ways of building and creating better incentives for cities and urban residents…and entirely another thing to gloat over suburban or industrial decline when people are in hardship. It’s not like I love suburbs or auto dependency, and I also believe that $4 is a problem (But on the other hand, people keep telling me that one of the big problems in the US is that gas is too cheap.)
🙂 I hope that the price of gasoline will one day reflect its full social/environmental costs, but when that happens overnight, with no time to prepare, the results aren’t pretty.
On the other hand if it doesn’t happen it all, people will just default to their F-250s.
I like your blog BTW
Well, and there’s a big difference between increasing prices with taxes we could then use to boost up transit provision and rising prices in general.
Mighty kind of you.
This articles sounds like one I should read. This article looks at only economic development, using “export price indexes”, which I have no clear idea about at this point. In any case, if there is no tradeoff between economic growth in suburbs and that in urban areas, what does this mean to local economic development policies? Well, I guess each citiy/town is not really thinking of beating down surrounding jurisdictions, but they seem to compete for any sort of sources of tax revenues).
If “regions that show evidence of either are economically less productive than places that have both strong suburbs and downtowns”, then why can’t we promote more regional economic development in more metroplitan areas? Or are we doing so? (Obviously, I don’t know the current status of whether or not regional economic development policies are put secondary to local ones. Sorry for my ignorance.)
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