Estimation and analysis of labor productivity in Spanish cities

The relationship between city size and territorial productivity hasattracted much attention in the urban economic literature. Some theories on thefield claim for a strong positive correlation between the size of the municipalitiesand their income, mainly motivated by economical reasons, geographical characteristicsor other factor of the urban environment. Unfortunately, in many countries the empirical research on this topic is not possible given the lack of data of incomeat a local level. This paper proposes the use of entropy econometrics to estimateurban income and urban productivity according to city size from aggregate information,which can be defined as an exercise of ecological inference. With the estimateddata a regional classification based on the relevance of the cities size allowsus to measure the relevance of agglomeration economics on the cities productivityin Spain.