In the vicinity of a city, farmers are confronted with increasing agricultural land prices and rents along the rural-urban gradient, but they concurrently enjoy the advantages associated with proximity to a larger and wealthier consumer base. We hypothesize that farmers transition from...

This paper addresses the timing of historical transition from rural to urban activity. In our model, rural production has constant returns and meets subsistence needs, while urban production has scale economies and meets the demands of higher-income consumers. Urbanization occurs sooner when...