Premature Deagglomeration: Expensive Housing and the Technology Life Cycle

Authors: Christopher Esposito*, UCLA
Topics: Economic Geography, Urban and Regional Planning, Quantitative Methods
Keywords: agglomeration, innovation, patents, housing
Session Type: Paper
Day: 4/11/2018
Start / End Time: 1:20 PM / 3:00 PM
Room: Regent, Marriott, River Tower Elevators, 4th Floor
Presentation File: No File Uploaded


Coastal cities in the United States are among the most innovative places in the world, but they are also among the most expensive to live and do business in. Could their onerously high housing costs slow the rate of technological change? This study investigates the effect of inelastic housing supply on the agglomeration of patent production in U.S. metropolitan areas, 1975-2009. While I find that inelastic housing supply does not weaken the agglomeration of patent production in the newest and most dynamic technological fields, patent production in the slightly older and more mature technological fields responds to inelastic housing supply by shifting to less costly cities. Cities with less expensive housing have weaker agglomeration economies, so the premature deagglomeration of patenting activity may impede future innovation in these fields.

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