1. Urbanization and Development: Is LAC Different from the Rest of the World?
Mark Roberts (GSURR, World Bank), Brian Blankespoor (DEC-RG, World Bank), Chandan Deuskar (U-PENN), and Ben Stewart (GOST, World Bank)
Presentation prepared for session on “Urban Expansion: Measurement Challenges and Implications for Policy”, 2017 Land & Poverty Conference, World Bank, Washington, DC.

2. Urbanization and Development: Is LAC Different?
Stylized fact #1
Stylized fact #2
Urbanization and Development: Is LAC Different?

3. Urbanization and Development: Is LAC Different?
Stylized fact #1
Stylized fact #2
Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
UN WUP data
[1]
[2]
[3]
Urban pop. share
4.215***
4.338***
4.254***
[14.70]
[15.21]
[14.64]
LA_dummy
-0.386**
[-2.090]
C_dummy
0.595*
[1.934]
LAC_dummy
-0.143
[-0.853]
Constant
6.742***
6.697***
6.744***
[38.22]
[38.67]
[38.20]
Observations
146
R-squared
0.600
0.623
0.602
Adjusted R-squared
0.597
0.616
UN WUP data
[1]
[2]
[3]
Agric. share
-1.159***
-1.171***
-1.145***
[-10.72]
[-10.87]
[-10.44]
LA_dummy
0.078*
[1.965]
C_dummy
-0.124*
[-1.831]
LAC_dummy
0.031
[0.848]
Constant
0.725***
0.722***
0.718***
[37.37]
[34.73]
[33.90]
Observations
146
R-squared
0.444
0.473
0.446
Adjusted R-squared
0.440
0.462
0.439
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Relationship between GDP pc & urbanization (left) and between urbanization & agricultural share of GDP (right), using UN urbanization data (based on each country’s own definition of urban)
Urbanization and Development: Is LAC Different?

4. Urbanization and Development: Is LAC Different?
…but this may be misleading
‘Facts’ are based on official national definitions of urban areas, which exhibit wide variation across countries
Definitions of ‘urban’ less stringent in LAC countries
E.g. among those countries that use a population size threshold to define a settlement as urban, mean threshold for LAC is less than 2,000 people
Compares to a global mean threshold of 4,800
Main aim of paper:
To test whether these relationships are still observed when using standardized urban definitions – i.e. do Latin American countries still appear to be “over-urbanized” and Caribbean countries “under-urbanized”?
Urbanization and Development: Is LAC Different?

5. Consistent urban definitions
Methodologies & data
Urbanization and Development: Is LAC Different?

6. Explore two different methodologies
Agglomeration Index (Uchida and Nelson, 2008):
Developed by Uchida and Nelson (2008) for WDR09
Uses gridded population data
Defines a grid cell as urban if satisfies 2 criteria:
Min. population density of 150 people per sq. km;
Within 60 min. travel time by road from a settlement of at least 50,000
The “cluster approach”:
Developed by Dijsktra and Poelman (2014)
Classifies population grid cells according to density
‘Urban clusters’: contiguous grid cells with density ≥ 300 people per sq. km. & combined population ≥ 5,000
Urbanization and Development: Is LAC Different?

7. Data (population distribution)
LandScan
Produced by Oak Ridge National Laboratories.
Uses census data, admin. boundaries, land cover data, & other spatial data
Resolution: 1km x 1km
Global Human Settlements Population (GHS Pop) – 2015 (beta release)
Produced by European Commission’s Joint Research Center (JRC) & Columbia University (CIESIN)
Uses only JRC’s Global Human Settlements Layer (GHSL) to disaggregate population
Resolution (as used in this analysis): 1km x 1km
WorldPop – 2015
Produced by University of Southampton
‘Random forest’ modeled layers available for 53 countries (inc. 27 LAC countries, accounting for 99% of region’s population).
Uses data on built-up areas, topography, locations of hospitals & schools, etc.
Resolution: 100m x 100m
Urbanization and Development: Is LAC Different?

8. Combination of methods & data sources yields multiple sets of results
LandScan
GHS Pop
WorldPop AI √
Cluster – all urban clusters
Generate 6 global maps of consistently defined urban areas
Use 6 maps to generate 6 different sets of (consistently defined) national urban population shares
Urbanization and Development: Is LAC Different?

9. Visual comparisons of degree of agreement between different maps
Strong agreement for core urban areas; agreement declines as move to peripheries of major cities & also for smaller urban settlements
Urbanization and Development: Is LAC Different?

10. Urbanization and Development: Is LAC Different?
Results
Revisiting the stylized facts – are latin American countries really “over-urbanized”?
Urbanization and Development: Is LAC Different?

11. Urbanization and Development: Is LAC Different?
Stylized fact #1
For Stylized Fact #1, AI-LandScan results suggest that, once urbanization is measured consistently, Latin American countries no longer exhibit lower than expected GDP per capita.
Likewise, Caribbean countries no longer exhibit higher than expected GDP per capita.
Results generally robust to use of alternative population data sets (e.g. GHS-Pop or WorldPop) & alternative use of cluster method.
Dependent variable: ln (GDP per capita)
AI - LandScan 2012
[1]
[2]
[3]
Urban pop. share
4.050***
4.102***
4.077***
[12.36]
[12.20]
[12.27]
LA_dummy
-0.049
[-0.237]
C_dummy
-0.267
[-0.753]
LAC_dummy
-0.099
[-0.537]
Constant
6.685***
6.670***
[31.48]
[31.01]
[31.40]
Observations
146
R-squared
0.515
0.517
0.516
Adjusted R-squared
0.511
0.507
0.509
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Urbanization and Development: Is LAC Different?

12. Urbanization and Development: Is LAC Different?
Stylized fact #2
For Stylized Fact #2, results based on AI – LandScan suggest that Latin American countries no longer appear to be “over-urbanized”.
Likewise Caribbean countries no longer appear to be “under-urbanized”.
Results generally robust to use of alternative population data sets (e.g. GHS-Pop or WorldPop) & alternative use of cluster method.
Dependent variable: Urban share of national population
AI - LandScan 2012
[1]
[2]
[3]
Agric. share
-1.092***
-1.067***
-1.079***
[-10.29]
[-9.890]
[-10.03]
LA_dummy
0.007
[0.164]
C_dummy
0.096
[1.419]
LAC_dummy
0.027
[0.769]
Constant
0.754***
0.746***
0.748***
[39.61]
[35.87]
[35.97]
Observations
146
R-squared
0.424
0.432
0.426
Adjusted R-squared
0.420
0.418
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Urbanization and Development: Is LAC Different?

13. Urbanization and Development: Is LAC Different?
Conclusion
When urbanization measured based on official definitions, LAC countries appear to depart significantly from basic stylized facts:
Latin American countries have relatively low levels of GDP per capita given their levels of urbanization, while Caribbean countries have relatively high levels;
Latin American countries appear to be “over-urbanized”, while Caribbean countries appear to be “under-urbanized”.
But, once a consistent definition of urban areas is adopted, these two basic anomalies disappear – LAC no longer appears so different.
Urbanization and Development: Is LAC Different?

14. Urbanization and Development: Is LAC Different?
Thank you
Urbanization and Development: Is LAC Different?

15. Annex – Additional slides & results
Urbanization and Development: Is LAC Different?

16. Urbanization and Development: Is LAC Different?
Data (travel times)
Travel time data (for AI):
WB Transport SRP team adapted & applied an algorithm initially developed by Nelson (2008) as input into WDR09
Update the AI by using more current input data for travel time estimation that includes: roads, railroads & land cover
Origin cities of 50,000 population or more are the same as Nelson (2008)
Urbanization and Development: Is LAC Different?

17. Urbanization and Development: Is LAC Different?
Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
AI – GHS Pop
[1]
[2]
[3]
Urban pop. share
3.923***
3.971***
3.938***
[10.67]
[10.51]
[10.57]
LA_dummy
0.001
[0.006]
C_dummy
-0.246
[-0.644]
LAC_dummy
-0.055
[-0.280]
Constant
6.601***
6.580***
[26.23]
[25.73]
[26.14]
Observations
146
R-squared
0.441
0.443
0.442
Adjusted R-squared
0.438
0.431
0.434
AI – GHS Pop
[1]
[2]
[3]
Agric. share
-0.952***
-0.924***
-0.939***
[-8.847]
[-8.471]
[-8.607]
LA_dummy
0.001
[0.015]
C_dummy
0.112
[1.633]
LAC_dummy
0.027
[0.735]
Constant
0.777***
0.769***
0.771***
[40.27]
[36.56]
[36.58]
Observations
146
R-squared
0.352
0.364
0.355
Adjusted R-squared
0.348
0.351
0.346
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the AI approach on GHS Pop data.
Urbanization and Development: Is LAC Different?

18. Urbanization and Development: Is LAC Different?
Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
AI – World Pop
[1]
[2]
[3]
[4]
Urban pop. Share
2.902***
2.040***
2.075***
3.942***
[4.187]
[3.118]
[3.348]
[6.098]
LA_dummy
0.809***
[3.859]
C_dummy
0.875**
[2.374]
LAC_dummy
0.817***
[4.041]
Ntnl. pop. Density
-0.289***
[-3.933]
Constant
7.362***
7.346***
8.000***
[19.38]
[21.91]
[22.90]
[22.11]
Observations 40
R-squared
0.316
0.526
0.525
0.517
Adjusted R-squared
0.298
0.486
0.500
0.491
AI – World Pop
[1]
[2]
[3]
[4]
Agric. share
-0.976***
-0.986***
-1.055***
-1.015***
[4.657]
[-3.596]
[-3.884]
[-5.737]
LA_dummy
-0.035
[-0.632]
C_dummy
0.064
[0.735]
LAC_dummy
-0.025
[-0.464]
Ntnl. pop. Density
0.050***
[4.056]
Constant
0.666***
0.677***
0.692***
0.466***
[17.94]
[10.12]
[10.39]
[7.955]
Observations 40
R-squared
0.363
0.396
0.367
0.559
Adjusted R-squared
0.347
0.346
0.333
0.535
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the AI approach on World Pop data.
Urbanization and Development: Is LAC Different?

19. Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – LandScan (All urban clusters)
[1]
[2]
[3]
Urban pop. share
3.789***
3.807***
3.816***
[8.262]
[8.091]
[8.167]
LA_dummy
-0.100
[-0.407]
C_dummy
0.017
[0.0409]
LAC_dummy
-0.072
[-0.330]
Constant
6.842***
6.844***
6.838***
[23.35]
[23.11]
[23.24]
Observations
146
R-squared
0.322
Adjusted R-squared
0.317
0.308
0.313
EC – LandScan (All urban clusters)
[1]
[2]
[3]
Agric. share
-0.740***
-0.714***
-0.719***
[-7.350]
[-6.973]
[-7.068]
LA_dummy
0.036
[0.966]
C_dummy
0.073
[1.133]
LAC_dummy
0.045
[1.333]
Constant
0.710***
0.698***
0.699***
[39.27]
[35.38]
[35.58]
Observations
146
R-squared
0.273
0.283
0.282
Adjusted R-squared
0.268
0.272
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on LandScan data. These results are for all urban clusters.
Urbanization and Development: Is LAC Different?

20. Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – LandScan (HDC only)
[1]
[2]
[3]
Urban pop. share
3.604***
3.750***
3.761***
[7.040]
[6.996]
[7.032]
LA_dummy
-0.317
[-1.210]
C_dummy
0.014
[0.031]
LAC_dummy
-0.239
[-1.014]
Constant
7.924***
7.914***
7.910***
[40.39]
[40.17]
[40.24]
Observations
146
R-squared
0.256
0.264
0.261
Adjusted R-squared
0.251
0.248
EC – LandScan (HDC only)
[1]
[2]
[3]
Agric. share
-0.629***
-0.584***
-0.582***
[-6.439]
[-6.028]
[-6.059]
LA_dummy
0.100***
[2.808]
C_dummy
0.089
[1.465]
LAC_dummy
0.098***
[3.062]
Constant
0.427***
0.404***
[24.35]
[21.64]
[21.75]
Observations
146
R-squared
0.224
0.271
Adjusted R-squared
0.218
0.256
0.261
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on LandScan data. These results are for high-density clusters only.
Urbanization and Development: Is LAC Different?

21. Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – GHS Pop (All urban clusters)
[1]
[2]
[3]
Urban pop. share
0.396
0.277
0.335
[0.485]
[0.336]
[0.409]
LA_dummy
0.136
[0.461]
C_dummy
0.547
[1.089]
LAC_dummy
0.233
[0.888]
Constant
8.867***
8.917***
8.873***
[14.07]
[14.05]
Observations
146
R-squared
0.002
0.011
0.007
Adjusted R-squared
-0.005
-0.010
-0.007
EC – GHS Pop (All urban clusters)
[1]
[2]
[3]
Agric. share
0.011
0.034
0.025
[0.141]
[0.411]
[0.303]
LA_dummy
0.012
[0.414]
C_dummy
0.080
[1.551]
LAC_dummy
0.028
[1.042]
Constant
0.761***
0.753***
0.755***
[52.71]
[47.83]
[47.94]
Observations
146
R-squared
0.000
0.017
0.008
Adjusted R-squared
-0.007
-0.003
-0.006
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on GHS Pop data. These results are for all urban clusters.
Urbanization and Development: Is LAC Different?

22. Urbanization and Development: Is LAC Different?
Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – GHS Pop (HDC only)
[1]
[2]
[3]
Urban pop. share
1.727***
1.674***
1.684***
[3.010]
[2.877]
[2.900]
LA_dummy
0.047
[0.164]
C_dummy
0.440
[0.903]
LAC_dummy
0.141
[0.548]
Constant
8.437***
8.435***
8.431***
[32.29]
[32.12]
[32.17]
Observations
146
R-squared
0.059
0.065
0.061
Adjusted R-squared
0.053
0.045
0.048
EC – GHS Pop (HDC only)
[1]
[2]
[3]
Agric. share
-0.275**
-0.252**
-0.253**
[-2.532]
[-2.279]
[-2.303]
LA_dummy
0.046
[1.118]
C_dummy
0.051
[0.740]
LAC_dummy
0.047
[1.289]
Constant
0.459***
0.448***
[23.54]
[21.00]
[21.13]
Observations
146
R-squared
0.043
0.054
Adjusted R-squared
0.036
0.034
0.040
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on GHS Pop data. These results are for high-density clusters only.
Urbanization and Development: Is LAC Different?

23. Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – World Pop (All urban clusters)
[1]
[2]
[3]
[4]
Urban pop. share
0.244
0.480
0.555
1.274
[0.320]
[0.782]
[0.916]
[1.336]
LA_dummy
0.999***
[4.359]
C_dummy
1.330***
[3.532]
LAC_dummy
1.062***
[4.899]
Ntnl. pop. density
-0.205*
[-1.725]
Constant
8.751***
8.044***
8.002***
9.043***
[20.43]
[21.43]
[21.56]
[20.07]
Observations 40
R-squared
0.003
0.408
0.395
0.077
Adjusted R-squared
-0.024
0.358
0.362
0.027
EC – World Pop (All urban clusters)
[1]
[2]
[3]
[4]
Agric. share
-0.241
-0.547
-0.588
-0.302
[-0.845]
[-1.480]
[-1.635]
[-1.360]
LA_dummy
-0.117
[-1.587]
C_dummy
-0.059
[-0.504]
LAC_dummy
-0.112
[-1.541]
Ntnl. pop. density
0.079***
[5.071]
Constant
0.567***
0.671***
0.679***
0.252***
[11.23]
[7.439]
[7.717]
[3.432]
Observations 40
R-squared
0.018
0.086
0.078
0.421
Adjusted R-squared
-0.007
0.010
0.028
0.390
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on WorldPop data. These results are for all urban clusters.
Urbanization and Development: Is LAC Different?

24. Dependent variable: ln (GDP per capita)
Dependent variable: Urban share of national population
EC – World Pop (HDC only)
[1]
[2]
[3]
[4]
Urban pop. share
2.831**
2.043**
2.032**
3.218***
[2.636]
[2.303]
[2.286]
[3.024]
LA_dummy
0.877***
[4.031]
C_dummy
1.259**
[3.537]
LAC_dummy
0.947***
[4.550]
Ntnl. pop. density
-0.158*
[-1.820]
Constant
8.149***
7.833***
7.835***
8.696***
[25.94]
[26.58]
[26.67]
[20.78]
Observations 40
R-squared
0.155
0.475
0.458
0.224
Adjusted R-squared
0.132
0.431
0.429
0.182
EC – World Pop (HDC only)
[1]
[2]
[3]
[4]
Agric. share
-0.542***
-0.684***
-0.655***
-0.556***
[-3.253]
[-3.105]
-3.055]
[-3.402]
LA_dummy
-0.033
[-0.744]
C_dummy
-0.073
[-1.049]
LAC_dummy
-0.036
[-0.843]
Ntnl. pop. density
0.018
[1.601]
Constant
0.338***
0.381***
0.374***
0.265***
[11.44]
[7.084]
[7.125]
[4.894]
Observations 40
R-squared
0.218
0.242
0.233
0.269
Adjusted R-squared
0.197
0.179
0.191
0.229
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
Notes: t-statistics in brackets. *** Significant at 1% level; ** at 5% level; * at 10% level.
The relationship between GDP and urbanization (left) and between urbanization and agricultural share of GDP (right), using the cluster approach on WorldPop data. These results are for high-density clusters only.
Urbanization and Development: Is LAC Different?