Land Use and Modern Cities O’Sullivan Chapter 9. For Wednesday (Response Paper in Class) Read: –Mieszkowski, Peter and Edwin S. Mills, (1993). “The Causes.

Land Use and Modern Cities

O’Sullivan Chapter 9

For Wednesday (Response Paper in Class)

• Read:– Mieszkowski, Peter and Edwin S. Mills,

(1993). “The Causes of Metropolitan Suburbanization,” Journal of Economics Perspectives, vol. 7, Summer 1993, pp. 135-147.

– Nachyba, Thomas J. and Randall P. Walsh (2004) “Urban Sprawl” Journal of Economic Perspectives Vol 18 (4).

Suburbanization

• Explores economic forces behind monocentric city.

• Why does employment is split localized CBD, suburban centers and other space.

• Suburbanization of Population• Suburbanization of Manufacturing• Suburbanization of Office Space

Suburbanization of Population

• Population Gradient where • Factors that potentially contributed

to suburbanization:– Rising Incomes– Lower Commuting Costs– Old Housing in Central City– Racial Conflict, Crime and Education– Central City Fiscal Problems

ue

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_milessquaredpopulatione

Suburbanization of Manufacturing• Improvements on Merchandise

Transportation:– Intracity trucks– Intercity trucks

• Improvements on workers transportation– Automobile

• Other factors– Assembly line– Airports

Suburbanization of Office Space• Advances in communication

technology:– E-mail– Teleconferencing

Group Discussion (5 minutes)• Some retailers locate along major

streets, forming commercial streets. Why don’t these retailers locate in the city center or in a suburban mall?

Glaeser and Kahn (Brookings, 2001)

• Goal of the Paper: Address employment decentralization of American cities.– Analyze stylized facts of the Monocentric

City– Examine why firms choose particular

locations:• Land costs• Access to ideas• Access to workers• Transport costs savings

Distribution of People and Jobs in Metro Areas

Distribution of Industry in Metro Areas

Roadmap of the paper

1. Define measure of employment concentration

2. Test for Monocentric City Model3. Explain the decentralization of

employment across MSA’s4. Explain the decentralization of

Employment across SIC’s

Empirical Tests of the Monocentric City Model

• Poverty is concentrated in poor cities

• Commuting times raise with distance from city center

• Incomes raise with distance to the city

• Are edge cities polycentric or just diffused

Main measure of employment concentration

• Employment Gradient (β):

• Intuition: If β Large City Concentrated in CBD If β Small Diffused

u

MileSquareEmployment

_log

0

e

u

e

u

Tests Monocentric City Model• Poor households live in the CBD

(Figure 7)

• Commuting Time Raises with u(Figure 8)

• Income Raises with Distance to the City(Figure 9)

• Suburban employment is decentralized, not polycentralized

uiceHouse

Pr_

uTimeComm

_

uIncomeHousehold

_

Tests for the Monocentric City: Figures 7-10

Decentralized Employment across MSA

• Population & Employment (Figure 10)• City Age & Decentralization (Figure

11)• City Year Built & Decentralization

(Figure 12)• Results from Table 7 (Dependent

Variable is β)»What matters? Industry Type and City Age

Figure 11 and Figure 12

Decentralization Across Industries• Results Table 8:

– Correlation between worker density and employment density (Causality?)

– Test for transportation costs– Test for knowledge & information

economies– Test for land costs– Politics and decentralization

(employment border effects)

Table 7

Table 8

Discussion: What matters?

• After the evidence presented by Kahn and Glaeser, what seems to be driving the decentralization of employment: city characteristics or industry technological change?