Creative Class

Here’s the map from the Social Science Research Council’s American Human Development Project.

The pattern is more or less what you would think. Catherine Rampell from Economix notes that:

Connecticut, which has the highest development of all American states, is roughly comparable with Ireland (the fifth most-developed country worldwide). But Mississippi has an H.D.I. level roughly on par with that of Turkey (#76 in the international development rankings).

MapScroll and Economix clear up any remaining confusion about an earlier, problematic map. Check out the project’s website and terrific interactive maps.

Andrew Sullivan points to Ed Glaeser’s Economix  post on the geography of unemployment and finds a common thread: “Edward Glaeser compares city to city unemployment numbers and affirms Richard Florida’s thesis.” Glaeser writes:

While the disparity in unemployment rates is enormous, it isn’t random. Some areas aren’t just miraculously better able to handle the downturn. Long-standing features of the urban landscape can explain the bulk of the variation in today’s unemployment rates.

Given the enormous gap in unemployment between skilled and unskilled workers, it isn’t surprising that skills best explain today’s metropolitan unemployment rates. The share of adults with college degrees in 2000 can, on its own, explain about one-half of the variation in the unemployment rate.Somewhat remarkably, the educational level of the metropolitan area before World War II can do almost as well.

Here’s his scatter-plot.

Source: Edward L. Glaeser, via Economix

Glaeser also finds that regional unemployment is “strongly linked to manufacturing.” Here’s his plot of the correlation between current unemployment and manufacturing’s share of the labor force in manufacturing in 1970.

Source: Edward L. Glaeser via Economix

Regional unemployment is also related to density, finding that “unemployment is lowest in those areas that are most centralized.” Sprawling places appear less resilient economically.

Source: Edward L. Glaeser via Economix

His conclusions: invest in skills and human capital; “beware industrial policies aimed at keeping America tied to heavy industry;” stop trying to breathe life back into declining regions; and encourage mobility.

While the regional diversity within the United States might prompt politicians to pursue policies that target aid to distressed regions, that seems likely to be counterproductive. America has always dealt with regional economic disparities through migration. … Today’s recession will also prompt mobility, probably toward more skilled, more centralized cities with less historical commitment to manufacturing.”

I could not agree more. Our urban policy, such that it is, is decidedly backward looking. It’s high time urban policy focus on leveraging the three key things - mobility, density, and human capital accumulation - that are real engines of prosperity.

From the New York Times Economix:

Over at Economix, Princeton economist Alan Krueger weighs in on how to measure and evaluate the popularity or success of popular musicians.

To an economist, the most popular artist is the one who would sell the most tickets at a given price. That is, if all artists charged the same price, whoever would attract the largest audience would be the most popular. Likewise, the most popular author is the one who sells the most books at a given price. Demand is higher for some artists and authors than others.

But herein lies the rub: The price of concerts (and books) varies. If Bruce Springsteen charges a lower price than Madonna, his revenues may well be lower even if he draws more fans.

Only in the special case where an increase in price exactly offsets a reduction in the number of tickets sold would gross revenue measure the popularity of an artist. That is, if artist A sells 10 percent fewer tickets by charging 10 percent more, gross revenue could be used as a measure of popularity.

Another consideration is the number of concerts the performers are willing to supply. Celine Dion may have been willing to perform more shows than Bruce Springsteen, accounting for her higher revenues.

Finally, unlike book sales, concert fans cannot always buy a ticket at the list price. Ideally, the revenue collected in the secondary resale market — by scalpers, for example — should be included in the rankings of artists as well.

For those so inclined, a longish but very interesting paper on the subject with Marie Connolly is here.

There’s a great post by Edward Glaeser (in the Economix blog of the New York Times), titled “New York, New York: America’s Resilient City.”

In it, he describes how New York has managed to avoid the decay that has afflicted many large older cities, and, after a brief downturn in the 1970’s, came roaring back as arguably the most influential single city in the world.

His explanation? In a word - “smart people.”

“New York still has an amazing concentration of talent. That talent is more effective because all those smart people are connected because of the city’s extreme population density levels. Historically, human capital — the education and skills of a work force — predicts which cities are able to reinvent themselves and which ones are not. Those people who are continuing to pay high prices for Manhattan real estate are implicitly betting that New York’s human capital will continue to come up with new ways of reinventing the city. “

Glaeser continues, describing why dense cities succeed…

“They thrive by enabling us to connect with each other, which then promotes learning and innovation. The current downturn will only increase the returns to being smart, and you get smart by hanging around smart people. As long as New York continues to attract and connect those people, the city will continue to thrive.”

Now here’s what every city planner wants to know. Is this replicable? Can this success be engineered or encouraged, and are the effects measurable in 10 years, 20 years, a lifetime?

Does anyone have successful examples of campaigns and projects to replicate this resilient infrastructure? Or perhaps, examples of some cautionary unsuccessful attempts?

Best wishes to everyone for a creative and fruitful New Year!