Guide to economic evaluation part 3: What is agglomeration?
Debates over major transport investments often get caught up in arguments over benefit-cost ratios, or BCRs. In recent years, projects such as the Transmission Gully and Puhoi to Warkworth motorways and the City Rail Link have been criticised for their low BCRs.…
4 Comments Proximity and Integration (The Metropolitan Revolution)
Our open, innovative economy increasingly craves proximity and extols integration, which allows knowledge to be transferred easily between, within, and across clusters, firms, workers and supporting institutions, thereby enabling the creation of new ideas that fuel even greater economic activity and growth.…
Auckland as a Consumer City – And what it might mean for the CRL
In this recent post we discussed agglomeration economies in consumption. Just to re-cap, agglomeration economies describe the external economic benefits that arise from proximity. They’re essentially the economic benefits of cities.
The benefits of agglomeration are realised by both “producers” (typically employees in the form of higher wages or businesses in the form of higher profits) and “consumers” in the form of more diverse/specialised goods and services (NB: I use a broad definition of “goods and services”, which includes all forms of social/cultural interaction).…
The two-sided density dividend: Agglomeration economies in *consumption*
Why are people – both in NZ and around the world – increasingly choosing to live in cities?
The answer usually advanced in response to this question, at least from an economic perspective, is “agglomeration economies”. In this post I want to unpack a few things about agglomeration economies, before discussing why I think our current understanding places too much focus on production as opposed to consumption.…
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