City Size and Environmental Quality

Abstract

Distribution of population can be interpreted in an economic sense as the distribution of the labor force resulting from industrial agglomeration or economies of scale. The general tendencies toward concentration of population have important ramifications with respect to the various kinds of externalities that are created and are most severe in the big metropolitan areas. Notwithstanding, at least in the big metropolitan areas of developed countries, after population has reached a certain critical level of concentration, a subsequent decline in population has been observed (Berry and Gillard 1977). Environmental degradation and the costs of controlling environmental quality may be significant contributory factors in this population decline. Although metropolitan governments are in charge of policy for the conservation and improvement of environmental qualities in their areas, the effectiveness of public expenditure for environmental quality seems to be decreasing with respect to the improvement of environmental quality (Hoch 1972). In this chapter we explore the relative influence of two elements — agglomeration economies and external diseconomies of environmental quality — as they relate to individual location choice, local government, and, more generally, city size.