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Urban Studies, Vol. 25, No. 2, 150-161 (1988)
DOI: 10.1080/00420988820080201
© 1988 Urban Studies Journal Limited

Agglomeration Economies: Localization or Urbanization?

Ronald L. Moomaw

Oklahoma State University, Stillwater, OK 74078

I estimate localization and urbanization economies with a methodology and data different from those of Henderson and Nakamura. After demonstrating the problems associated with using a single agglomeration variable, I present my estimates. As Nakamura found for Japanese cities, I find evidence of both localization economies and urbanization economies but I also find evidence of urbanization diseconomies in some industries, as did Henderson. My evidence for localization and urbanization economies in American cities is stronger than Henderson's evidence. Finally, I show that the pattern of agglomeration economies by industry is consistent with observed patterns of industrial location.


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