An economic-ecological model of urban growth and urban externalities: empirical evidence from Italy

The importance of urban size for urban sustainability is well known it plays an important role in the possibility of shaping the quality of urban living conditions. For this reason. it is important to study urban dynamics in connection with the issue of environmental quality. Moreover. awareness of the existence of cyclical patterns in urban dynamics, which we stress in this paper. can be useful for the formulation of environmental policies enabling a steady state equilibrium to be reached in terms of sustainability by flattening out the cyclical waves. A number of more quantitative models for the interpretation of urban growth has been provided; these models are related to the well-known ecological prey-predator model of Lotka-Volterra, and provide a good interpretative framework of the territorial phenomena, characterised by strong feed-back mechanisms. Recently, a pure economic model, linking the per-capita income and the urban rents has been suggested as a possible interpretative model of urban growth which is characterised by two main advantages: (a) its capacity to overcome some of the limits of the previous prey-predator models, like the necessity to apply the concept of an urban carrying capacity; (b) its pure economic feature. The present paper presents the model and the logic behind it and provides an empirical analysis of the model based on the Italian case. An econometric model is presented on the relationship between urban population growth and urban rent, based on a database of 95 Italian cities in time series from 1963 to 1996: the feedback mechanisms between the two variables emerge. This work represents the first attempt to provide an estimate of the prey-predator model based on real data. (C) 2002 Elsevier Science B.V. All rights reserved.