Agglomeration Economies and Spatial Configurations in Rural Areas

Abstract

The question to be addressed in this paper is that of the agglomeration and dispersion forces that are likely to account for the location of people and jobs in rural areas and the way these forces explain spatial patterns in rural areas depending on urban influence. Economic geography models may provide suitable tools with which to investigate the organization of rural areas. We first review these models, focusing on dispersion forces, which rest on land consumption and transport costs. We then suggest a set of hypotheses concerning the main forces at work in rural areas. Intensity of agglomeration economies is hypothesized to be related to urban size, which in turn induces increasing land rents and finally agglomeration diseconomies. Such diseconomies encourage population spread around the city and in a second stage a possible partial decentralization of population-serving firms, which seek proximity to households because of shopping transport costs. The consequences in terms of spatial patterns are that beyond a certain threshold of city size, decentralization of population-serving firms occurs, giving rise to secondary service centers, whereas services remain concentrated in the center for smaller cities. Empirical results concerning population densities, labor-force exchanges, and distribution of residentiary services in labor-market areas surrounding cities in six French regions are presented.