No. 1/2014: Quality of life and population size: Causal evidence with historical mines

Abstract

In this paper I investigate the causal effect of endogenous population size on quality of life. It has been suggested that the quantity and quality of consumer amenities increase with urban scale. For instance, in cities there would be numerous and diverse restaurants, cultural services, and shopping opportunities. As cities grow they can support even higher levels of consumer amenities. It is an empirical question whether population scale effects are positive; the attractive traits of urban environments might be offset by disamenities like crime, traffic and other congestion effects. To deal with endogeneity, I utilize a quasi-experimental design where I exploit the exogenous spatial distribution of mineral resources by using historical mine locations. The findings suggest a robust positive urban scale effect on quality of life that pass multiple tests of confounding factors. This evidence suggest that the provision of consumer amenities increase in population size, which in general will lead to divergence between countryside and city regions in quality of life.