High Density Means More Economic Growth and More Happiness, Too

Using new analysis of recent US Census data, Richard Florida demonstrates that “[c]ities and regions where density is more concentrated near their urban cores — appear to gain the biggest economic advantage.” That, and a tad more happiness.

Read Time: 2 minutes

November 30, 2012, 6:00 AM PST

By Erica Gutiérrez

World population

Arenamontanus / Flickr

You likely won't be surprised to read Richard Florida assert that, “[d]ensity — the close clustering of people together in communities — is a big factor in the technological and economic progress of cities and nations." However, in this article, Florida takes this view a step further by looking at how “different types of density are associated with a wide range of regional economic outcomes." Case in point, when crudely measuring density by the sheer number of people and land area, many are surprised to learn that Los Angeles is in fact denser than New York. That said, density is far more concentrated in central Manhattan than in any part of L.A. For Florida, this begs the question, “Do cities with more concentrated density — where people and economic activity are concentrated and spiky near the center — see even better economic performance?”

Using data from the recent U.S. Census, with analysis by colleague Charlotta Mellander of the Martin Prosperity Institute, Florida shows that, “[e]conomic growth and development, according to several key measures, is higher in metros that are not just dense, but where density is more concentrated." Florida asserts that "[t]his is true for productivity, measured as economic output per person, as well as both income and wages.” College grads and creative workers, for example, are more likely found in highly concentrated metro areas, working in knowledge-rich industries from arts and entertainment, to science and technology, to business and management. Findings also show that more highly dense areas also have greater diversity, more bike commuters and less lone drivers.

Finally, housing prices and happiness indicators are also higher in areas where population-weighted density is taken into account. The higher housing prices come from a variety of factors, including higher income and wages, but are also based on innate and imposed restrictions such as the natural geography and city policies including zoning. But with regards to gauging happiness, Florida writes, “happiness levels are modestly associated with density that is more concentrated at the center of the city.”

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