The Modern City Puzzle

p.245-247

Why do big stay together so well? A city is simply a collection of factors of production-capital, land, and labor- and land seems to always be less expensive outside the city. Yet people don't spread out as fast evenly over the landscape. Robert Lucas was troubled by this phenomenon as well. To help answer this curiosity he had, he turned to the work of an economist named Jane Jacobs. Jacobs claims that a city is a settlement that produces its own growth. It thrives off of building new work onto the old. It also is seen as having a higher social status if you live in the city. For example, people are willing to pay a lot of money to have the title of living in Manhattan, even though it doesn't really benefit them that much more other than being close to shopping.