Urban Agglomeration Economies in the U.S. Greenhouse and Nursery Production

WP 2011-18 October 2011JEL Classification Codes: R11; Q10; C21Greenhouse/nursery production in the U.S. has been highly concentrated in metropolitan areas. This paper examines the emergent, complex relationship between urban agglomeration and greenhouse/nursery production in the Northeast, Southeast and Pacific regions of the U.S. We use spatial econometric models to examine the effect of urbanization, spatial concentrations of firms, and firm-internal factors on greenhouse/nursery production levels. The analysis distinguishes the attributes of agglomeration forces stemming from urbanization economies and localization economies. Results suggest that the greenhouse/nursery sector may benefit from clustering among firms within the same sector. Also, greenhouse/nursery production levels are positively associated with population growth and the direct market access to consumers. The economic vibrancy of greenhouse/nursery businesses in densely populated areas would depend upon the capacity to adjust to increased land competition in metropolitan areas, while exploiting marketing opportunities offered by proximity to urban consumers