Cities in Bad Shape: Urban Geometry in India
Cities are valuable to the extent they bring people (and jobs) together. To what extent is this value affected by the difficulty of commuting from various points in the city to others? While many factors can affect commuting length, this paper investigates one determining factor of urban commuting efficiency, previously highlighted by urban planners but overlooked by economists: city shape. A satellite-derived dataset of night-time lights is combined with historic maps to retrieve the geometric properties of urban footprints in India over time. I propose an instrument for urban shape, which combines geography with a mechanical model for city expansion: in essence, cities are predicted to expand in circles of increasing sizes, and actual city shape is predicted by obstacles within each circle. With this instrument in hand, I investigate how city shape affects the location choices of consumers, in a spatial equilibrium framework à la Roback-Rosen. Cities with more compact shapes are characterized by larger population, lower wages, and higher housing rents, consistent with compact shape being a consumption amenity. The implied welfare cost of deteriorating city shape is estimated to be sizeable. I also attempt to shed light on policy responses to deteriorating shape. The adverse effects of unfavorable topography appear to be exacerbated by building height restrictions, and mitigated by road infrastructure.
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