Income Distribution, City Size, and Urban Growth

Abstract

The relationship between city size, urban growth, and the metropolitan income distribution is discussed in this paper. Drawing on basic economic theory we develop the 'monopoly' hypothesis which suggests that increases in city size and urban growth will lead to greater income inequality. The monopoly hypothesis suggests that increases in size and growth raise monopoly rents earned by those insulated from competition. Regression results using the Gini concentration ratio as a measure of family and male income inequality on 1970 are consistent with the hypothesis. Our results suggest the benefits of urban growth are unevenly distributed and increase measured income inequality.