We analyse impacts of economic and other factors on long-run urban growth in New Zealand. Growing cities must have preferred attributes (such as natural characteristics, social amenities and transport infrastructures) relative to other cities. We outline a theoretical model that includes distance-related effects on individual utility and thence population location. We test the model over 1926 to 2006 across 56 New Zealand towns using instruments dating from 1880 to deal with potential endogeneity. Three factors – land-use capability, sunshine hours and proximity to Auckland – are found to influence settlements’ long-run population growth. In addition, the proportion of population that is Māori is negatively correlated with population growth over the second half of the sample period. Supplementary evidence suggests that this variable relates to the importance of human capital for the growth of settlements over recent decades.