Productivity and City Size: A Critique of the Evidence

A critique of two leading articles in the productivity and city-size literature results in revised estimates of the productivity advantages of large cities. In particular, extant estimates of the elasticity of productivity with city size are revised downward by over 100 percent for the manufacturing sector and about 25 percent for the entire urban economy. After revision, productivity advantages of larger cities are found to be much larger for the nonmanufacturing sector than for the manufacturing sector. Hence, revitalization policies for large cities should be focused on nonmanufacturing sectors.