“Conviviality is an economic actor”

The reason the title of today’s blogpost is in quotation marks is because, well, it is a quote. How I wish it had been my coinage, this phrase. It is, instead, a quote by Patrick Bernard. Who is Patrick Bernard? A person behind the idea of Hyper Voisins, or Super Neighbors.

I was re-reading Elinor Ostrom’s Nobel Prize lecture to prepare for yesterday’s post, this paragraph came up:

“Evidence pointed out three mechanisms that increase productivity in polycentric metropolitan areas: (1)
small- to medium-sized cities are more effective than large cities in monitoring performance of their citizens and relevant costs, (2) citizens who are dissatisfied with service provision can “vote with their feet” and move to jurisdictions that come closer to their preferred mix and costs of public services, and (3) local incorporated communities can contract with larger producers and change contracts if not satisfied with the services provided, while neighborhoods inside a large city have no voice.”

https://www.nobelprize.org/uploads/2018/06/ostrom_lecture.pdf (pp 411)

Patrick Bernard’s idea is to challenge this notion by creating many small to medium sized cities within large cities. Actually, he will likely (and correctly) disagree – the idea is to have many small to medium sized communities within large cities.

More than 1,200 of these so-called Super Neighbors communicate via 40 WhatsApp groups dedicated to queries like finding a cat sitter or seeking help to fix broken appliances. They hold weekly brunches, post-work drinks and community gatherings at which older residents share memories with younger generations. To much fanfare, the group also hosts an annual banquet — La Table d’Aude — for the residents on a table 400 meters long, about 440 yards, running through the middle of a street.


Why does this matter? Because (some) urbanists have long pushed the idea of mixed-use neighborhoods, and it is a truly powerful idea. The modern, arguably cooler way of referring to this is to talk about 15-minute cities.

If you are an Indian living in a major Indian city reading this, you might think ah, Zepto. Or Swiggy Instamart, or BlinkIt, or something similar. But nope, that’s only half the puzzle. Or if you prefer, that’s only the hardware aspect of a 15 minute city. It is, in fact, less than half the puzzle, because 15 minute deliveries may actually make things worse. How could the convenience of fifteen minute delivery possibly make things worse?

A more astute reading of the culture would have paid attention to the longing for connection in American life, a condition the pandemic has only deepened. Isolation, as sociologists remind us over and over, is rampant. It was hard not to notice that restaurants in New York City were packed once they were brought to life again in the summer of 2020. Part of the pleasure of shopping in a neighborhood grocery store or a farmers’ market or going to the gym is the prospect of human contact — catching up as a matter of improvisation, serendipity remaining a singular and animating force of metropolitan life.


In other words, cities are as much about software as they are about hardware – in fact, they’re more about the software than they are about the hardware. It is people that define a city, not its infrastructure. Don’t get me wrong, infrastructure matters. I stay in Pune, boss, and we can go on for hours about our (for lack of a better word) infrastructure. But the infrastructure matters for the people who stay in a city, and a city is made a city by the interactions of people who stay within it. So called dark stores prioritize convenience, by paying the opportunity cost of a feeling of isolation.

Patrick Bernard wants to fight this feeling of isolation, because isolation is the lack of a sense of belonging to a community. And any sociologist will tell you that the sense of not belonging to a community is very much Not A Good Thing.

The challenge, as with everything else in economics, is scalability. A neighborhood successfully implementing a solution such as this, while a wonderful thing in and of itself, isn’t a scalable solution. How should one think about scalability? They’re thinking about it already:

Looking further afield, the group is exploring ways in which its vision of cities carved in the image of, and powered by the bonds between, their inhabitants can be replicated and scaled up. It believes the answer is the creation of trained and paid roles — so-called Friends of the Neighborhood — to coordinate each district.
“People have begun to listen,” Mr. Bernard said. “Everyone wants their neighborhood to be like ours. Now we need to find out how to make our approach more systemic and to adapt it to the different challenges and contexts that every city in the world has.”


Five other links related to this topic that you might enjoy reading:

  1. The Global Observatory of Sustainable Proximities
  2. Placemaking Europe
  3. Coverage by Pop-up City
  4. Coverage by the Guardian
  5. The OG, Jane Jacobs

Why Linear Cities Won’t Work

A Column, A Rebuttal, And What Are Census Towns Anyway?

The Efficient Market Hypothesis is alive and well, I am glad to report. At least when it comes to writing rebuttals. I will not get into the controversy at all in this post, but I do need to establish the context for what I will be writing about today.

Shamika Ravi wrote a column about what are, in her opinion, problematic national surveys in our country:

Using projected population estimates, we find that nearly all major surveys in India that were conducted post-2011 and used the Census 2011 for the sampling frame have overestimated the proportion of the rural population significantly. This is one of the several problems with data quality, but it is a critical concern — and appropriately highlights the problem at hand.


I am but one of many who happen to disagree with many of the points raised in this column. But that’s not what I want to write about in today’s post. Pronab Sen wrote a column in response, and this post is about a particular point in his column. But first, a key excerpt from Sen’s column:

The Census measures urban population in two categories — (a) statutory towns/cities; and (b) Census towns. Statutory towns/cities are entities which are legally recognised as urban areas by the concerned state governments and are governed by municipalities/nagar palikas. Census towns, on the other hand, are legally rural areas, that is, coming under panchayats, which exhibit characteristics of urban agglomerates on three counts — size of the population, population density and proportion of the male workforce not engaged in agriculture. It so happens that in Census 2011, a major part of the rapid urbanisation that Ravi talks about occurred in Census towns and not in the statutory urban areas.
The surveys, on the other hand, follow only the statutory definition while classifying rural and urban areas. Thus, although all surveys use the Census as the sampling frame, Census towns are treated as a part of the rural sector and are included in the rural sample. Therefore, practically all the discrepancy that Ravi makes so much of is simply the outcome of differences in the definition of urban areas in the Census and the surveys.


Read both essays in their entirety to get a sense of what the debate is about, but for the purpose of today’s post let’s focus on census towns. As Pronab Sen mentions, census towns are “legally rural areas” – but they “exhibit characteristics of urban agglomerates”. What characteristics? Three, per Sen: size of the population, population density and proportion of the male workforce not engaged in agriculture.

Well ok, you might say, but what values do these variables need to have for an urban agglomeration to be considered a “census town”?

The Census definition identifies urban settlements as either areas already governed by ULBs or areas having a population greater than 5,000, a density over 400 people per square kilometre, and 75% of the male working population employed in non-agricultural activities. By this definition, India is 31% urban.
Areas that satisfy these criteria but are not already governed by ULBs are known as Census Towns (CTs).


When was this definition framed? In, er, 1961. And nope, it hasn’t been updated since. But defining what is an “urban agglomeration” and what isn’t is quite tricky. Consider this chart, for example:


As the article from which I sourced this chart says, “while experts may disagree on the precise definition of ‘urban’, they all agree that it makes sense to view the entire spectrum of settlements—from small villages to large urban agglomerations—as a continuum rather than in terms of the rural/urban binary”

And by the way, the same definition of urban agglomeration will apply to the 2021 Census. In, in fact, you read the PDF, all rural units having a population of 4000 or more at the preceding census (2011) will be examined, as they will almost certainly have crossed the 5000 mark in 2021. This, of course, is the point that Pronab Sen is making in his report. Since these will likely be the best performing parts of hitherto “rural” India, classifying them as urban here on in will make rural India look far worse.

OK, but why does all of this matter all that much, eh? Census towns, in particular – what’s the big deal? Well, here’s why it matters:

Census Towns continue to be governed by panchayats despite having the density of urban areas. Rural Local Bodies (RLBs) and ULBs were designed to cater to the varying governance needs of rural and urban areas. The 73rd and 74th Constitutional Amendment Acts specify different powers and functions for the
two bodies. For instance, as seen in Figure 2, ULBs are mandated to provide water for residential, industrial, and commercial purposes, while RLBs are mandated to provide only safe drinking water. This means that industrial or commercial units in de facto urban areas may find it harder to access adequate water compared to those in areas governed by ULBs. Panchayats are not required to provide many of the other basic services required of dense urban living, for example, sewerage lines, fire services, and building code regulations. Therefore Census Towns remain grossly underserved. As of the 2011 Census, 55 million people – the population of South Africa – lived in them.

https://www.idfcinstitute.org/site/assets/files/15116/reforming_urban_india_idfc_institute.pdf (pg. 14)

Here’s Fig.2 from that same report:

Defining urbanization is a tricky endeavor at the best of times in any country. Doing so for India comes with its own unique set of challenges. But when the definition may have an impact on the answer to the question of how well India has done in the recent past, well, that’s a whole other problem, and it’s not only restricted to economics.

But hey, now you know what a census town is. There’s that.

Where Are All the Skyscrapers in India?


I was part of a small but fascinating discussion at The Fat Labrador Cafe yesterday (about which more in tomorrow’s post). The idea was to speak about under-rated/counter-intuitive ideas in economics, and a session that was supposed to last for an hour ended up starting at a little after nine pm, and going on well past eleven pm!

One of the ideas that I thought would be under-rated and counter-intuitive was that cities are magical places. Not only, it turns out, was this not under-rated and counter-intuitive where the audience was concerned, but it was almost quotidian. Huh, but also yay!

I’ve said it before, and I’ll say it again: cities are awesome, fantastic and brilliant, and we need many more of ’em on our planet.

Lebenskunst, The Economist magazine tells us, is the art of living well. Wiktionary has an even better translation, calling it the art of life. But whatever the definition, The Economist’s ranking of the world’s most liveable cities places Vienna at the top.


It is, after all, an index, and that means that you can choose to argue endlessly about which metrics are included and which aren’t, what weights have been given and what should have been the weighting instead, about how liveability isn’t all that measurable and especially comparable, and on and on and on.

The index rates cities along thirty different factors, bucketed into five different categories: stability, health care, culture and environment, education and infrastructure. Note that the article we’re talking about is from June, but that doesn’t really matter for us today. The good news, for the most part, is that “global activity is only around one-sixth lower than before the virus emerged. This is reflected in the global average liveability score, which has bounced back to something approaching normality.”

Of course, parts of the world have done worse compared to the pre-pandemic era. Almost all Chinese cities are worse off, although that is not at all surprising. Re: India, the bad news is that not a single Indian city comes in the top ten, and the good news is that not a single Indian city comes in the bottom ten! A summary of the report is available to read here, once you share your email address with the EIU. No Indian city makes the list of the cities that moved up the most in the rankings, nor does any Indian city make the list of cities that dropped down the most.

The full report costs an insane amount of money, and there’s no way I am paying for it, but you might want to just take a look at a Wikipedia article, as I did, for more information. I wasn’t aware of Numbeo, and obvious concerns about quality of data aside, it is a very interesting project.

Take a look at India’s data, it is fascinating. Pune comes in at number 2, which fills me with pride, and also with worry about what is up with the rest of India’s cities. If we’re at number 2…

Barcelona’s Superblocks

And if you’re curious about how it all turned out, considering this video is six years old

A Walk Down Abhimanashri Lane

Or Abhimanashree, whichever version you prefer.

But however you choose to spell it, join me, won’t you, as I saunter down this leafy little lane on a wintry Sunday morning?

Abhimanashri Lane is today a bit of a misnomer. But as a true-blue Puneri, I remember a time when it really and truly was a lane, and a very quiet one. Today, it forms the base of a very useful triangle, connecting Baner Road and Pashan Road, with the apex of the triangle being Pune University signal. Why this is a very useful triangle is a long story that will bring much angst to every Punekar reading this, so we will move on for the moment.

Accompanying us on this jaunt is my nine-year old daughter, whose ability to ask endless questions is matched only by her ability to ask questions about what we’re going to eat next. As a gourmand who pretends to teach economics for a living, I thoroughly approve of both of these qualities.

And so down Abhimanashri Lane we go, appreciating the quietness of the Sunday morning, pausing every now and then to meet a new canine friend, and breathing in the soft yet crisp wintry air that Pune still affords us in the absence of traffic.

Until we reach a nice little bakery on the left hand side, with a cute sitting-out area, and what looks from without to be a promising array of baked treats lying in wait inside. The daughter deploys the most beseeching look she can muster, but she needn’t have. I am chomping at the bit myself, so in we go to take a look. There’s croissants, there’s breads, there’s pastries and there’s coffee. Heaven, to be precise. Having suitably nourished ourselves, we resume our walk.

But then the economist in me starts to wonder.

We had gone there at around nine in the morning, and we were the only cutomers in the cafe. There was one delivery order that was picked up, but that apart, there was no one else who walked in. The food was very good without being truly outstanding, but that is not (at all) a knock against the place. In fact, if anything, I would have expected more customers.

So why, the economist in me wondered, was it empty?

  1. Abhimanashri is a truly lovely place to walk around in, but it is a low density neighborhood. Most people might wonder if I could have phrased that sentence better – wouldn’t it be the case that it is a lovely place to walk around in precisely because it is a low density neighborhood? Well, yes, but also no. Read on.
  2. It is not just a low density neighborhood, but it is also almost entirely residential. There’s a misal join towards the end of the lane, and a couple of shops and offices, and one upmarket salon. But it is safe to say that it is overwhemingly residential in terms of character.
  3. It is also a no-parking zone, for reasons that we refused to go into earlier, but now we must. Read this article to get a sense of why it is a no parking zone.
  4. So, low density neighborhood, not enough offices, plus a no parking zone along its entire length. Not enough folks in the vicinity, whether residents or otherwise, and the inability to park along its entire length. Nor, if memory serves me right, is there a bus-stop along the entire length of the lane.
  5. So walk-in customers are unlikely. Plus, the inconvenience of having to park a ways away and then walking down might disincentivize other customers.
  6. I’d much rather sit at home and order from there using Zomato or Swiggy or some such, rather than actually try and reach the place.
  7. And so while I thoroughly enjoyed my visit there and wouldn’t mind going there again, the inconvenience of it all makes it rather unlikely that I will.
  8. Which is why you should read up about mixed-use neighborhoods, and urban planning more generally. I have a couple of videos on the subject, or you might want to read more about it by searching on Google, or you might want to read this lovely thread on Twitter.
  9. But the next time you take a walk down one of your favorites streets in your favorite city, you might want to ask what makes that street your favorite, and what were the opportunity costs of that street being the way it is. Ask yourself in what ways that street could become better, and how your city might go about planning for it to be so. Get into the habit of doing this all the time, because why wouldn’t you want to think about how your city could be better.
  10. And then, suitably incentivized, learn more about urban planning, because it is a fascinating subject that every budding economist should know more about.
  11. Past EFE posts on urbanization, if you’re interested, are here.

When Cars Were The Intruders

The MIT Press Reader has a fascinating extract from a book called “Fighting Traffic: The Dawn of the Motor Age in the American City.”, by Peter Norton. The piece is about the early 1920’s in America, and focuses on how Americans struggled to get used to the idea that cars were going to be around in ever increasing numbers:

City people saw the car not just as a menace to life and limb, but also as an aggressor upon their time-honored rights to city streets. “The pedestrian,” explained a Brooklyn man, “as an American citizen, naturally resents any intrusion upon his prior constitutional rights.”  Custom and the Anglo-American legal tradition confirmed pedestrians’ inalienable right to the street. In Chicago in 1926, as in most cities, “nothing” in the law “prohibits a pedestrian from using any part of the roadway of any street or highway, at any time or at any place as he may desire.” So noted the author of a traffic survey commissioned by the Chicago Association of Commerce.  According to Connecticut’s first Motor Vehicle Commissioner, Robbins Stoeckel, the most restrictive interpretation of pedestrians’ rights was that “All travelers have equal rights on the highway.” 


Even more amazingly, at least to my twenty-first century ears:

In New York City’s traffic court in 1923, a judge explained that “Nobody has any inherent right to run an automobile at all.” Rather, “the courts have held that the right to operate a motor vehicle is a privilege given by the state, not a right, and that privilege may be hedged about with whatever limitations the state feels to be necessary, or it may be withdrawn entirely.”  The law would not deprive pedestrians of their customary rights so that motorists could roam at will in cities.


We’ve come a very long way since! I and a good friend of mine, Binoy Mascarenhas, have had quite a few arguments about the redevelopment of many streets in Pune city in terms of the widening of footpaths, and whether it makes sense or not. My contention has been that this (the redevelopment) definitely makes sense eventually, but the current high priority problem for Pune city is better public transport. Widening footpaths (and thereby narrowing streets) ought to be done only if we can increase the percentage of people traveling by public transport. Once that is done, we should absolutely make our cities more pedestrian friendly. Binoy is going to be in Pune this weekend, and I look forward to continuing the debate.

But I found it amazing to note that there was a time when the cultural adoption of a car as an inevitability on our streets was a new phenomenon. With the benefit of hindsight, it is obvious – the car, and the mental model of it as being top dog on the streets – required a change in how folks would have viewed the streets back then. But even so, the idea that, for example, some passages in the excerpt made me sit up:

Some even defended children’s right to the roadway. Instead of urging parents to keep their children out of the streets, a Philadelphia judge attacked motorists for usurping children’s rights to them. He lectured drivers in his courtroom. “It won’t be long before children won’t have any rights at all in the streets,” he complained. As the usurper, the motorist, not the child, should be restricted: “Something drastic must be done to end this menace to pedestrians and to children in particular.” 


Maybe I’m far too much of a modern day individual, but I genuinely struggle to see how we could adopt our cities today to a pedestrian first framework. The volume of traffic seems far too high, and we seem far too dependent on our vehicles for us to even try and imagine what something like this might look like at a city scale.

But there was, it would seem, a time when this was not just possible, but was actually reality. At what costs, and with what benefits – and should we aspire to return back to those presumably idyllic times, is a question I look forward to debating about this weekend.

And, of course, one more book has been added to the pile. So it goes.

The Solow Model and China

If you don’t know what the Solow model is, here is a great place to get started:

There are 11 videos in that series, and if you can spare the time, please watch all of them. Just two a day (they’re not more than 5 minutes each), and you’ll be done come the weekend.

But in effect, here is what the Solow model says:

  1. Output for a nation is a function of three (actually four) things:
    1. Capital (K): Buidings, ports, dams… infrastructure, basically.
    2. Education Augmented Labor (eL): The amount of hours that a person is able to put in to their work, but with the built in assumption that an educated person is likely to be more productive than a person without education.
    3. Ideas: Read the paragraph below to get a sense of what this means in practice.

Think about this blogpost that you are reading. I wrote it using my laptop, which is my capital. I will spend about an hour (that’s my plan, I’ll update you towards the end of this post about how well it worked out) writing it, and that’s the labor that I’ll be putting into this post. The fact that I have been “educated” in economics should mean that this post will be easier to write for me than, say, a gardener. The gardener could have written this post as well, of course, but it’s safe to assume that she would first have had to learn about the Solow model, and that, presumably, would have taken longer.

So that’s K and eL where the output (this blogpost) is concerned. But now think about it this way: what if another person, with a similar level of economics education as mine were to write this blogpost instead of me? Would that person have chosen this video, and these paragraphs to explain the Solow model? Maybe they would have recommended some other video, or some other podcast, or chosen to share details of an online textbook in which the Solow model is explained. That’s one way to think about ideas.

And so when you combine the capital (the laptop), the labor (the time I spend on this blogpost, given my education levels) and the ideas (what I choose to put into this blog post, and how), you get the output you’re reading right now.

What if I double the capital? Will the blogpost be done in half the time? Say I have an external monitor attached to my laptop – will two screens mean finishing the blogpost in half the time? It will save some time, but not by a factor of two, surely. Trust me, I have tried.

What if I double the labor? Hire an assistant to write this blogpost with me? The way I work, trust me, it will probably take longer! What if I go get a post-doc, to augment my education? Will that save me time? The hysterical laughter you hear in the background is the response of any PhD/post-doc student anywhere in the world, and that sound means a loud and resounding no.

In a sense, the Solow model asks these and related questions, and answers them using some graphs and equations. Except, of course, the Solow model does it for not one guy writing one blog, but for an entire nation at a time. There is no sense in me explaining the whole model over here, for it would be a case of me reinventing what is already a very good wheel. Please watch the videos.

But the Solow model is a remarkably useful way to get a handle on the long run growth prospects of a country. Is India likely to grow in the future? Well, is it going to add to its capital stock? Yes. Is it going to augment it’s stock of education augmented labor? Yes. Is it likely to produce more ideas than it is right now? Yes. And so the growth prospects for India look reasonably good.

Of course, there is more to the Solow model. All of this holds true given a strong and stable political system, well established rules of law, and strong and capable institutions. But so long as you believe that these are likely to continue to be so in the Indian case, you should be bullish on India.

What about, say, Japan? It has a capital stock that is more in need of replacement than new construction ( a feature of the Solow model that we have not discussed here, called depreciation), so it is unlikely that it will grow its capital stock too much. Here’s an example of what I mean. What about it’s stock of education augmented labor? Well, the news ain’t very good. Ideas? Trending upwards, but not by much. So if I had to bet on which country would grow more over the next twenty years, I would bet on India, not Japan.

Bear in mind that this is a model, and like all models, it is an imprecise abstraction of reality. So it is possible that at the end of the twenty year period, we find out that I am completely wrong. But if you think the Solow Model is a reasonably good model, you ought to bet the way I did.

So what about China?

Well, now, that’s a whole different story, and one that Noah Smith talks about in a recent blog post. Long story short, he doesn’t think China’s growth prospects are that great.

But the story is a little more complicated than that. The Solow model is a good model, sure, but it’s not as if the Chinese authorities/experts aren’t aware of the problem. And in his blog post, Noah looks at arguments put forth by two people who know a thing or two about China, and analyzes them critically.

The first argument is that sure, China’s demographics are on a downward trend, but what if we raised the retirement age for Chinese workers? Would that not solve the problem? Noah says no, probably not, because firms made of exclusively old folks isn’t necessarily a good idea. I wholeheartedly agree.

What about adding to China’s urbanization, and therefore its infrastructure? After all, China’s urbanization rate is “only” 64%. The inverted quotes around only in the previous sentence is because we, in India, are officially at 31%, but as in the case of China, it very much is a function of how you define urbanization. But similarly, in China, the urbanization rate is actually way more than 64%, and the Lewis turning point has already taken place in China, or will do so any moment.

And about ideas, well, China is an even more complicated story. Noah makes the point that China’s industrial policy is essentially a one-man army that is trying something that has never been tried before, and Noah is betting on it not quite working out. And given the events of the last year and a half or so, it is hard to disagree.

And so the Solow Model would probably tell you that China is unlikely to grow as fast in the near future as it did in the recent past, and even if you take into account potential adjustments, it likely will still be the case that China’s growth rate will start to plateau.

Please, read the entire post by Noah. But if you are a student of economics who has not yet met the Solow Model, begin there, and then get on to Noah’s post – your mileage will increase considerably.

Housing in Singapore

“Solved” is, at the least, ambitious phrasing. But the video is well worth watching. Via Sahil Shaikh, a SYBSc student at GIPE