Discussion paper

DP14717 Automobiles and urban density

How has the rise of the automobile influenced urban areas over the past century? In this paper we investigate the long-run impact of car ownership on urban population density, based on a sample of 232 city observations in 57 countries. Using the presence of a car manufacturer in 1920 as a source of exogenous variation, our IV estimates indicate that car ownership substantially reduces density. A one standard deviation increase in car ownership rates causes a reduction in population density of around 40%. For employment density we find almost identical results. This result has important implications for vehicle taxation, car ownership growth in developing countries, and new transport technologies such as automated vehicles.

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Citation

Ostermeijer, F, H Koster, J van Ommeren and V Mayland Nielsen (eds) (2020), “DP14717 Automobiles and urban density”, CEPR Press Discussion Paper No. 14717. https://new.cepr.org/publications/dp14717