NCPA - National Center for Policy Analysis

The Intellectual Vitality Of Cities

November 5, 1998

Cities have their benefits as well as drawbacks, Harvard University economist Edward Glaeser points out in a recent article in the Journal of Economic Perspectives. Cities will wither if the benefits of urbanization disappear or the costs of city life -- such as crime or poverty -- outweigh the benefits.

One benefit of cities is their intellectual stimulation. "The geographic proximity created by cities allows ideas to travel more rapidly," Glaeser says.

Here is some interesting evidence from his research:

  • About 96 percent of new product innovations occur in metropolitan areas.
  • Some 45 percent of these new innovations occur in just four metropolitan areas -- New York, Los Angeles, Boston and San Francisco.
  • A new patent is much more likely to cite another patent that is close spatially, researchers have discovered.

But will advances in communications and information technology make cities obsolete? After all, a rural resident with a computer hooked up to the Internet has at his fingertips just as much information as an on-line urbanite.

This is where the disadvantages of city living come in.

  • Some of the same factors which make cities intellectually vigorous also facilitate crime -- the ease of social interactions between criminals, scale economies in stolen goods and a bigger market of potential victims.
  • Poverty is another factor: while in the country as a whole, 10 percent of families are below the poverty line, the poverty rate for families in cities of over 1 million is 16.7 percent.
  • Then there are higher government costs in cities: those with populations below 100,000 spend 0.3 percent of their budgets on social welfare, on average -- but those of over 1 million spend 6.1 percent.
  • Finally, public schools in cities are worse than elsewhere.


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