The Urban Mortality Transition and Poor-Country Urbanization

Today, the world’s fastest-growing cities lie in low-income countries, unlike the historical norm. Also, unlike the “killer cities” of history, cities in low-income countries grow not just through in-migration but also through their own natural increase. First, we use novel historical data to document that many poor countries urbanized at the same time as the postwar urban mortality transition. Second, we develop a framework incorporating location choice with heterogeneity in demographics and congestion costs across locations to account for this. In the framework, people prefer to live in low-mortality locations, and the aggregate rate of population growth and the locational choice of individuals interact. Third, we calibrate this to data from a sample of poor countries and find that informal urban areas (e.g., slums) can absorb additional population more easily than other locations. We show that between 1950 and 2005 the urban mortality transition could have doubled the urbanization rate as well as the size of informal urban areas in this sample. Of these effects, one-third could be attributed to the amenity effect of lower urban mortality rates, while the remainder is due to higher population growth disproportionately pushing people into informal urban areas. Fourth, simulations suggest that family planning programs, as well as industrialization or urban infrastructure and institutions may be effective in slowing poor-country urbanization. (JEL I12, J11, N30, O15, O18, R11, R23)

IMPACT OF INFILL DEVELOPMENT ON PRICES OF EXISTING APARTMENTS IN FINNISH URBAN NEIGHBOURHOODS

Popularity of infill development is increasing because of the environmental benefits and cost saving potential it provides, which relate to the possibility to use existing infrastructure and services. However, the impact of infill development on value of existing properties has not been studied to a sufficient extent. Therefore, the aim of our study is to analyse whether infill development affects the prices of existing apartments. We carried out statistical analysis based on data from seven case neighbourhoods, and prices of more than 6000 housing transactions from one decade. The results of our analysis do not support the hypothesis of infill development affecting positively existing housing prices, but neither did the study show a significant negative effect. Both amenity effect and negative externalities may provide explanations as to why property values do not change due to infill development.