The term urbanisation describes two developments: On the one hand, the increasing growth of cities into urban agglomerations and, on the other hand, the deepened interdependence between cities and the periphery. Today, urban centers provide living space for more than 50 percent of the global population and are important engines of economic growth. At the same time, peripheral areas are becoming increasingly marginalised due to the accelerating urbanisation.
The economic and social processes which accompany urbanisation and peripheralisation have far-reaching consequences for regional development. Questions arise about the redistribution of economic activity, adequate public services, urban-rural relations and the spatial implications of digitalisation.
Our work on urbanisation and periphery comprises two core areas: First, we investigate the mechanics of so-called agglomeration forces, which explain why economic performance is disproportionately concentrated in cities and why people are willing to accept price premiums for housing close to the centre. Secondly, we examine the impact of continuing urbanization on the economic development of different urban and peripheral areas and derive implications for regional policy strategies.
It has always been a central question of regional economics why global economic output is disproportionately concentrated in cities and why people are willing to accept price premiums for housing close to the centre. In this project we investigate a main hypothesis on agglomeration forces, which may help to explain why cities enjoy a productivity advantage that drive current urbanization rates: Agglomerations are more productive and offer higher wage levels because population density makes social networks more efficient and therefore accelerates the diffusion of information and knowledge.
Anonymised mobile phone data on Switzerland allow us to make social networks visible and to test three hypotheses derived from the above argument:
Overall, the observed spatial differences in network structures can explain 25 percent of the land price gap between cities and peripheral areas in Switzerland. This new evidence for positive externalities of high population density closes a long-standing gap in the regional economic debate.