(IntechOpen.com, 2012-03-21) Pichardo Muñiz, Arlette; Otoya Chavarría, Marco
The process of agglomeration economies proceeds in increasing manner, indirectly affecting
productive activities such as education, public services, transportation and all of its linked
components. Nevertheless, there is a limit to this accumulative process where the gains from
economies of scales are reversed and this is related to the accumulation of decreasing costs
in the areas of agglomeration. These costs include price of factors (i.e., commuting) with
scarcer factors (land and labor); it also includes costs related to transportation (traffic, stress,
crime, etc.) (Polèse, 1998). Generally speaking, a city, just like any other economic resource,
begins to enter a phase of decreasing returns of scale and cost of essential urban services like
transportation, adopting an U-shaped trend, as explained in microeconomic analysis
(Camagni, 2005).
