The monocentric city model worldwide: rent, density, and transportation cost gradients in 734 cities

Abstract

I use the monocentric city model to relate urban rent and density gradients to a third gradient describing transportation costs. I estimate rent gradients for 734 cities world-wide using internationally comparable data on Airbnb properties. The average elasticity of rent to distance from the city center is -0.06. Rent gradients are less pronounced in cities that are smaller or located in upper-middle-income countries. Density gradients are steeper than rent gradients in most cities. Combining the two types of gradients, I estimate the elasticity of transportation costs to distance from the city center to be 0.3 on average. Taken together, the two estimates imply a concave transportation cost function. While I precisely match the Duranton and Puga (2022) urban cost estimate of 0.07 for the United States, my global estimate of 0.3 suggests that the US is an outlier, with transportation costs being less sensitive to distance than elsewhere.