A quick thought on hot spot policing and agglomeration economies

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5 Responses

  1. Orin Kerr says:

    Very interesting, David. Thanks for the links.

  2. Mike Madison says:

    I am always thrilled to see the phrase “agglomeration economics” in a blog post (really), but a distinction is in order: Not all cities display equal gains from agglomeration, and gains from agglomeration do not depend solely (or even primarily) on location-based solutions to coordination problems. Individual preferences related to agglomeration vary, firm sizes vary, industry structure varies, etc. Some cities (markets) display few gains from agglomeration. All of this is no news to Glaeser. For some useful supplemental reading, which Glaeser cites, take a look at Ben Chinitz’s 1961 paper, “Contrasts in Agglomeration: New York and Pittsburgh.“. One key point of that work is that using agglomeration economics to study drug policing or zoning law or any other aspect of urban policy requires an account of individual behavior.

  3. David Schleicher says:

    Thanks for the comment. Not quite sure how its responsive — I suggest that sellers in drug markets have substantial gains from co-location, which is an account of individual behavior. But if you’re interested in a more global account of how changes in agglomeration gains drove changes in local government law, you can check out my paper, The City as a Law and Economic Subject, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1471555

  4. Chris says:

    *”Real is estate is about co-location, co-location, co-location.”

  5. Mike Madison says:

    My point was that individual behavior varies, which is why gains from agglomeration are evident in some markets (including in some cities/regions) but less so in others. Not every individual behaves identically, let alone rationally. That, I hope, is obvious, but it’s important (I think) to flesh out that idea (what are the relevant dimensions of differential individual behavior?) and plug that fleshed out assumption into the agglomeration idea. Doing that makes it easier to understand why drug markets sometimes do re-appear elsewhere, and why clustered real estate development sometimes pops up in places other than downtown and sometimes does not. And why some cities thrive (New York), and how, and why some cities (Detroit) do not. Thanks for the link to your earlier paper.