Gabriel Ahlfeldt, Elisabetta Pietrostefani, 22 February 2019

Most countries pursue policies that implicitly or explicitly aim at promoting ‘compact urban form’, but so far these policies have not been well-grounded in evidence. This column summarises the state of knowledge on the economic effects of density on various economic outcomes. It concludes that densification policies may lead to aggregate welfare gains, but there may be regressive distributional consequences.

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