Economies of density

2017-10-22T15:22:20Z

2804:14D:2482:4A8:74A4:C0C5:29B5:A05C:

In microeconomics, '''economies of density''' express cost savings resulting from spatial proximity of suppliers or providers. Typically higher [[Population density|population densities]] allow synergies in service provision leading to lower [[unit cost]]s.<ref>{{Cite web|url=http://www.encyclo.co.uk/meaning-of-Economies%20of%20Density|title=Meaning of Economies of Density|website=www.encyclo.co.uk|language=en-US|access-date=2017-06-15}}</ref> If large economies of density exists there is an incentive for people to concentrate and agglomerate.<ref>{{cite web|url=https://www.philadelphiafed.org/research-and-data/publications/business-review/2012/q3/brq312_geography-history-economics-of-density-location-of-cities.pdf |title= Geography, History, Economies of Density, and the Location of Cities.| author= Jeffrey Lin |year=2012}}</ref>

Typical examples are found in [[logistics|logistic]] systems where the distribution or collection of goods is needed, such as solid [[waste management]].<ref>{{cite journal|last=Eggimann S., Truffer, B., Maurer, M.|title=Economies of density for on-site waste water treatment|journal=Water Research|year=2016|volume=101|pages=476–489|doi=10.1016/j.watres.2016.06.011}}</ref> Delivering, for instance, mail in an area with many postboxes results in overall cost savings and thus lower delivery costs.
Different network infrastructures such as electricity or gas networks show as well economies of density.

Economies of density are not to be confused with [[economies of scale]] where unit costs are not linked to spatial properties.

==See also==
* [[Economies of scale]]
* [[Economies of scope]]
* [[Network effects]]
* [[Economies of agglomeration]]

== References ==

{{Reflist}}


[[Category:Regional economics]]
[[Category:Economics effects]]
[[Category:Transport economics|*]]

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Economies of density