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Judged by theirYour browser does not support the element. revealed preferences, people love cities. Metropolises such as London and New York are bursting at the seams, with house prices to match. China, meanwhile, can boast at least six cities bigger than either of them. Across the world, 25% of people live in cities of over a million, up from just 15% six decades ago.Economists tend to think this is a great development. Cities, they argue, benefit from “agglomeration”, the consequence of so many people living in close quarters. For one thing, government and businesses can run more efficiently: scale helps everything from public transport to the recruitment of staff. For another, finding the next big idea is easier when like-minded people crowd together. Although London makes up 15% of Britain’s population, it counts for 22% of its economic output.But have economists overestimated the benefits of big cities? That is what a new working paper by Matthew Turner and David Weil, both of Brown University, suggests. Their analysis applies existing estimates of the impact of agglomeration on economic efficiency and the pace of invention to a model of the American economy. This allows the researchers to answer a provocative question: how different would America look if, from 1900 to 2010, no urban area had grown to a population of more than 1m people?According to their calculations, the answer is “not all that much”. Growth would have been slower, but only a bit: the researchers reckon that America’s total output would have been 8% lower in 2010 than it was in reality. Such an income gap is smaller than that between America and Denmark. Cities do make residents more productive, but the size of the conurbation does not matter too much. As Mr Weil puts it: “Without big cities, we would still have modern life as we know it.”City enthusiasts may not be entirely persuaded by the authors’ number-crunching, which inevitably relies on some heroic assumptions. Edward Glaeser of Harvard University points out that Messrs Turner and Weil presume innovation becomes harder over time, as the easy wins are taken, meaning big cities gain less than they would otherwise from bringing the best and the brightest together. Whether this pattern will continue in the future is uncertain. Artificial-intelligence boosters would certainly contend that innovation is likely to accelerate in the coming years.There is plenty about city life that is unpleasant. In September, for instance, Eric Adams, New York’s mayor, convened a “National Urban Rat Summit”, as part of his “war on rats”. But big cities also clearly afford benefits other than growth, as Mr Weil is keen to point out. Ultimately, high housing costs reflect people’s desire to live in them, and this does not only stem from sizzling job markets.
