Urbanomics
Most people would prefer to live in cities. We know that because they currently accept a financial penalty for doing so. Once you strip out the effect of the higher cost of living in cities – chiefly housing and tax – average city wages are lower than those in the countryside and small towns. Daniel Gross totted up the purchasing power of the NY dollar: a mere 61 cents; and higher NY wages compensate for less than half the difference. Edward Glaeser finds that a similar pattern holds across the US: real wages are lower, not higher, in the bigger cities.
Studies confirm that patents tend to spur other patents in the same region; commercial innovation is highly concentrated in urban areas.
Cities are economically resilient. Economies develop by changing; people are always being thrown out of work and always finding new jobs. That experience is less wrenching in a city.
Londoners contribute at least £1,700 ($3,450) a year more in tax than they receive in government spending. Wales, Scotland, the North East and Northern Ireland receive at least £2,000 per person more than they pay in tax.
“What have cities ever done for us?” by Tim Harford