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How cities form and why they change

A Rotman researcher looks at why neighbourhoods change, how they form and how their development relates to infrastructure projects

Nathanial Baum-SnowProfessor Nathaniel Baum-Snow wants city dwellers to stay skeptical.

Almost every day it seems like a politician or community leader proposes a new project — constructing a stadium, concert venue or transit line — that never quite pans out, he warns.

“In reality, these projects are rarely evaluated in a balanced way. It’s easy to get swept up by rosy predictions about increasing tourism, revenue and jobs for the city,” he says.

With tax dollars at stake and communities at risk of changing drastically, citizens need to think critically about proposed infrastructure projects, urges Baum-Snow, who is an associate professor in Economic Analysis and Policy at Rotman. In his research, he looks at why neighbourhoods change, how they form and how their development relates to evolving labour demands and infrastructure projects, including the construction of highways and railroads.

“When it comes to city and neighbourhood planning, it’s complicated. But there is a role for academics to think about these issues and provide some insight into what causes cities to change and restructure.”

The chance to conduct his research from Toronto — a city that is becoming increasingly gridlocked and faces a number of urban challenges — was a major factor for Baum-Snow’s decision to come to Rotman. Since moving to the city two years ago, he’s contributed to discussions and public events evaluating the city’s transit system and the possibility of establishing a Toronto-Waterloo tech cluster.


“When it comes to city and neighbourhood planning, it’s complicated. But there is a role for academics to think about these issues and provide some insight into what causes cities to change and restructure.”

-Nathaniel Baum-Snow, Associate Professor of Economic Analysis and Policy


Meanwhile, in his academic work, Baum-Snow has published extensively about the impact of transportation routes in developing regions like China. In one study, published in the Review of Economics and Statistics, he analyzed city plans and census data to track how highways have drastically changed cities in China, by moving manufacturing industries into urban areas.

In other work, he’s explored how the development of cities has contributed to growing income inequality.

“There’s been a fundamental shift in our economy. In bigger cities there’s an increased demand for skilled workers,” he says.

“We’re seeing wages for professional labour in big cities increasing much faster than wages for unskilled labour, or for the same type of work in smaller cities. It’s all contributing to a wider wage gap.”

In future work, he plans to take a closer look at the impact of changing labour demands on cities and individuals. More specifically, he wants to know what happens to wages and the labour market, in the long run, when new firms and industries establish themselves in cities. And he’s curious about the opposite circumstance — what happens to kids who grow up in neighbourhoods where major plants or factories close? How might a negative labour shock impact their outlook, test scores, educational attainment and futures?

Ultimately, Baum-Snow’s work can tell us a lot about how industries and infrastructure shape community development. And his models can help urban planners make better predictions and evaluate city proposals in a more holistic way.

“In policy circles, we’ve been focused on evaluating specific ideas about transportation, wages and housing one at a time. But cities are dynamic and each change has the power to restructure communities,” he says. “We need to use the formal tools and current models in urban economics to arrive at more accurate predictions of what these changes mean.”


Written by Rebecca Cheung | More Rotman Insights »

Meet the Researcher

Nathaniel Baum-Snow

Associate Professor of Economic Analysis and Policy


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