IMF Working Papers

<p>
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It is obvious that holding city population constant, differences in cities across the world are
enormous. Urban giants in poor countries are not large using measures such as land area,
interior space or value of output. These differences are easily reconciled mathematically as
population is the product of land area, structure space per unit land (i.e., heights), and
population per unit interior space (i.e., crowding). The first two are far larger in the cities of
developed countries while the latter is larger for the cities of developing countries. In order to
study sources of diversity among cities with similar population, we construct a version of the
standard urban model (SUM) that yields the prediction that the elasticity of city size with
respect to income could be similar within both developing countries and developed countries.
However, differences in income and urban technology can explain the physical differences
between the cities of developed countries and developing countries. Second, using a variety
of newly merged data sets, the predictions of the SUM for similarities and differences of
cities in developed and developing countries are tested. The findings suggest that population
is a sufficient statistic to characterize city differences among cities within the same country,
not across countries. </p>