Agglomeration Index: Towards a New Measure of Urban Concentration

The United Nations (UN) compiles information on urbanization (urban population and its share of total national population) that is reported by various countries. But there is no standardized definition of 'urban', resulting in inconsistencies. This situation is particularly troublesome if one wishes to conduct a cross-country analysis or determine the aggregate urbanization status of the regions and the world. This chapter proposes an alternative measure of urban concentration, an agglomeration index (AI). It is based on three factors: population density, population of 'large' city centre, and travel time to that large city centre. The main objective of AI is to provide a consistent definition of settlement concentration to conduct cross-country comparative and aggregated analyses. As an accessible measure of economic density, AI lends itself to the study of concepts such as agglomeration rents in urban areas, the 'thickness' of a market, and the travel distance to such a market.