Data Points for Glaeser, Krugman et al

On the train coming home from school today, I came across two headlines on my phone. Headline number one:

“The Great Growth Disconnect: Population Growth Does Not Equal Economic Growth,” at The Atlantic Cities. Upshot: There isn’t really any correlation between metro areas that are becoming richer and those that are becoming more populous. This goes against all sorts of economic theory and common sense and observed history, but is a pretty well-established recent trend, and also is actually a major contributor to the divergence of income across the country.

Headline number two:

“Development Watch: Lincoln Park,” on Curbed Chicago. Here we learn that a developer wants to build a six-story apartment building in the highly desirable neighborhood of Lincoln Park, just north of downtown Chicago, replacing a three-story building and increasing the total number of dwelling units on the property from 43 to 60. But the neighbors – whose annual income, if memory serves, is somewhere in the vicinity of twice the average of the Chicago metro area as a whole – don’t want to have six-story buildings around. And so probably the building will get downsized, and fewer people will get to live in one of the highest-quality-of-life neighborhoods in the city, meaning more people will have to choose between living in a less-desirable neighborhood, or not living in Chicago at all.

Most of us understand externalities, and the need to regulate them. We understand, for example, that a neighborhood’s right to determine its own development patterns does not include, say, building an industrial facility that dumps its toxic waste downriver. Why should it include preventing people who want to live there from living there, when there are national consequences to this kind of behavior if every such neighborhood engages in it?

3 thoughts on “Data Points for Glaeser, Krugman et al

  1. Florida is taking a purely “vertical” view of economic growth. It’s in a sense the same story as your Lincoln Park example. A small, stationary community of the best and brightest will continually get more productive. But is that really economic growth? Traditionally the size of an economy has been measured by total output – GDP. That’s why the quarterly GDP figures are so widely followed – they even define what an economic contraction is (recession) by following it. I agree with Florida that quality is an important measure, but it’s not the only measure. San Francisco looks great on that measure – but so does anyplace else that only offering opportunity to the elite.

    1. That’s true, but don’t you think that were the cost of living less inflated, many more non-elites would choose to live in places like San Francisco and Lincoln Park? You can earn more as, say, a barber in a place where there’s a lot more wealth, even if you’re not any more productive in San Francisco than you are in Phoenix. I think that, actually, is the main problem with “gated city” policies: it keeps the great mass of people who aren’t going to be Wall Street tycoons or start-up millionaires from benefiting from the wealth that those industries create.

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