We apply a model by Desmet and Rossi-Hansberg (2013) to quantify the impact of efficiency, urban amenity and excess friction on the population distribution of Chinese cities, using population census data in 2000 and 2010. By changing one of the above three characteristics into an average national level while keeping the other characteristics unchanged, we recalculated the urban population distribution. We found that there is an urban population reallocation when any one of the above three idiosyncratic characteristics has changed. On contrary, urban citizens utility level does not change much.
We also included the urban efficiency externalities factors and find that the majority of the urban population will move into only a few number of cities. As a result, these cities’ population will rise dramatically. However, there is still a small amount of people willing to live in small cities since the congestion will decrease individuals’ utility. Finally, we find that population redistribution pattern is the same for 2000 and 2010.Bachelor of Art
