At the heart of urban economics are agglomeration economies, which drive the existence and extent of cities and are also central to structural transformation and the urbanization process. This paper evaluates the use of different measures of economic density in assessing urban agglomeration effects, by examining how well they explain household income differences across cities and neighborhoods in six African countries. We examine simple scale and density measures and more nuanced ones which capture in second moments the extent of clustering within cities. The evidence suggests that more nuanced measures attempting to capture within-city differences in the extent of clustering do no better than a simple density measure in explaining income differences across cities, at least for the current degree of accuracy in measuring clustering. However, simple city scale measures such as total population are inferior to density measures and to some degree misleading. We find large household income premiums from being in bigger and particularly denser cities over rural areas in Africa, indicating that migration pull forces remain very strong in the structural transformation process. Moreover, the marginal effects of increases in urban density on household income are very large, with density elasticities of 0.6. In addition to strong city level density effects, we find strong neighbourhood effects. For household incomes, both overall city density and density of the own neighborhood matter.
Since 1960, urbanisation in Africa has soared from 15 percent to around 40 percent today. According to the UN, that figure should reach 60 percent by 2050. How and why urbanisation is taking place is paramount to the development of African economies, yet the basic facts of the process remain a puzzle to social scientists and policy-makers alike. In a recent working paper, we review the new literature on African urbanisation, attempting to sort out why it is occurring as well as key parts of the traditional urban literature that relate to Africa.
Africa’s urbanisation is characterised by its tremendous speed and heavy concentration. Today, urban giants like Lagos and Cairo have amassed more than 20 million inhabitants, whilst other African cities such as Kinshasa, Luanda, and Dar es Salaam (all above 5 million) continue to grow at breakneck speed. How these primary cities evolve, and their influence on the rest of the urban hierarchy will have tremendous impacts for Africa’s future development.