GY210      Half Unit
The Economics of Cities

This information is for the 2020/21 session.

Teacher responsible

Dr Davide Rigo, Prof Olmo Silva and Prof John Henderson


This course is compulsory on the BSc in Geography with Economics. This course is available on the BA in Geography, BSc in Economic History and Geography, BSc in Economics, BSc in Environment and Development and BSc in Environmental Policy with Economics. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.


Economics A (EC100) or Economics B (EC102). ST107 (or equivalent course in statistics) strongly recommended.

Course content

Urban economics is concerned with the spatial form of cities and the division of national economic activity into cities, both at a point in time and over time.  Three fundamental questions are: (1) Why are economic activities within a country so unequally distributed across space? (2) Why do cities (and more broadly agglomeration of firms and workers) emerge and in what locations? (3) Why are economic activities within cities unequally distributed in general and between areas near the city centre and those near or in the suburbs?

The main topics covered in this course include:

- Why do cities exist and why do firms cluster?

- What determines equilibrium city size and features of the urban system?

- City growth and spatial transformation

- Diseconomies in cities: Urban location, land rents and land use patterns

- Urbanisation in developing countries


In the Department of Geography and Environment, teaching will be delivered through a combination of classes/seminars, pre-recorded lectures, live online lectures, in-person lectures and other supplementary interactive live activities.


This course is delivered through a combination of classes and lectures across Lent Term.


This course includes a reading week in Week 6 of Lent Term.

Formative coursework

Students will be expected to prepare for group discussion of some readings and hand in short essays or problem sets.

Indicative reading

  • O’Sullivan. A. (8th edition) Urban Economics. Boston: Irwin- McGraw-Hill, 2012.
  • Greenstone M. R. Hornbeck and E. Moretti (2010), “Identifying agglomeration economies: Evidence from winners and losers of large plant openings”, Journal of Political Economy, Vol. 118, No. 3, 536-598.
  • Eid, Jean & Overman, Henry G. & Puga, Diego & Turner, Matthew A. (2008), “Fat city: Questioning the relationship between urban sprawl and obesity”, Journal of Urban Economics, Vol. 63, No.2, 385-404.
  • Duranton G. (2008), “Viewpoint: From cities to productivity and growth in developing countries”, Canadian Journal of Economics, Vol. 41, No. 3, 689-736, Sections 1, 2.1, 2.2, 2.3.3, 2.3.4, 2.4, 3.1, 3.2.
  • Henderson J.V. (2010), “Cities and development”, Journal of Regional Science, Vol. 50, No. 1, 515-540.
  • Henderson J.V., T. Regan and A.J. Venables (2016) “Building functional cities” Science 20 May 2016 


Exam (100%, duration: 2 hours) in the summer exam period.

Important information in response to COVID-19

Please note that during 2020/21 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the situation of students in attendance on campus and those studying online during the early part of the academic year. For assessment, this may involve changes to mode of delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: Geography & Environment

Total students 2019/20: 46

Average class size 2019/20: 15

Capped 2019/20: No

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills