Determinants of city growth in Brazil

In this paper. we examine the determinants of Brazilian city growth between 1970 and 2000. We consider a model of a city, which combines aspects of standard urban economics and the new economic geography literature. For the empirical analysis, we constructed a dataset of 123 Brazilian agglomerations, and estimate aspects of the demand and supply side as well as a reduced form specification that describes city sizes and their growth. Our main findings are that decreases in rural income opportunities, increases in market potential for goods and labor force quality and reduction in intercity-transport costs have strong impacts on city growth. We also find that local crime and violence, measured by homicide rates impinge on growth. (c) 2006 Elsevier Inc. All rights reserved.