Cities in a world of diminishing transport costs

TL;DR

This paper investigates how decreasing transport costs influence urban development, showing a trend toward fewer, larger cities at the national level and the potential decline of smaller cities, through analysis of Japan's census data from 1970 to 2015.

Contribution

It introduces a novel perspective by linking city evolution to pattern formation and self-organization, integrating economics, mathematics, and biology.

Findings

Fewer, larger cities dominate at the national scale.

Local city sizes tend to flatten, indicating potential extinction of smaller cities.

Results suggest a shift towards mono-centric urban structures.

Abstract

Economic activities favor mutual geographical proximity and concentrate spatially to form cities. In a world of diminishing transport costs, however, the advantage of physical proximity is fading, and the role of cities in the economy may be declining. To provide insights into the long-run evolution of cities, we analyzed Japan's census data over the 1970--2015 period. We found that fewer and larger cities thrived at the national scale, suggesting an eventual mono-centric economy with a single megacity; simultaneously, each larger city flattened out at the local scale, suggesting an eventual extinction of cities. We interpret this multi-scale phenomenon as an instance of pattern formation by self-organization, which is widely studied in mathematics and biology. However, cities' dynamics are distinct from mathematical or biological mechanisms because they are governed by economic interactions mediated by transport costs between locations. Our results call for the synthesis of knowledge in mathematics, biology, and economics to open the door for a general pattern formation theory that is applicable to socioeconomic phenomena.