Urban Economics Research Papers - Academia.edu (original) (raw)

^jf his book explores the economics of cities and urban problems. The quotes *~S from Parker and McQueen reflect our mixed feelings about cities. On the positive side, cities facilitate production and trade, so they increase our standard of living. In addition, they provide consumers with a wide variety of goods and services. Unfortunately, cities also have serious problems such as poverty, congestion, pollution, and crime. Although these problems are truly urban in nature, they could be solved without abandoning our cities. One of the purposes of this book is to show that policies that solve urban problems will increase the vitality of cities, causing cities to grow, not shrink. Another purpose of the book is to explain some broad changes in the size of cities and the fraction of the population living in cities. In 1990, over 75 percent of the U.S. population lived in urban areas, up from only 6 percent in 1 800. This rapid urbanization resulted in large part from the technological changes of the industrial revolution. A number of innovations in production and transportation increased industrial output and trade. Because most firms are located in cities, growing output and trade increased the size and number of cities. More recently, however, many northeastern and north-central U.S. cities actually lost population, a result of migration to the West and the South and a shift away from the traditional manufacturing economy. The book also explains some changes in the internal spatial structure of cities. In the nineteenth century, the typical large metropolitan area was monocentric, with Chapter 1 ing the convenient but unrealistic assumption that all production and consumption take place at a single point. In contrast, urban economics examines the where of economic activities. In urban economics, a household chooses where to work and where to live. Similarly, a firm chooses where to locate its factory, office, or retail outlet. 4. Does residential segregation contribute to poverty? 5. How does the federal government combat poverty? 6. What are the merits of reform proposals such as the negative income tax. workfare. earned-income tax credits, and mandated child support? The third part of the book also examines the spatial aspects of urban housing problems. Housing choices are linked to location choices because housing is im- mobile: when a household chooses a dwelling, it also chooses a location. The most important urban housing problems are segregation and the deca> o\ dwellings and neighborhoods in the central city. The two housing chapters address the following questions: mass transit (bus, light rail, or heavy rail). Since activities are arranged within cities to facilitate interactions between different activities, changes in the transportation system that affect the relative accessibility of different sites affect land-use patterns. The chapters on transportation address the following questions: 1 What causes congestion, and what are the alternative policy responses? 2. How does congestion affect land-use patterns? 3. What are the alternative policies for dealing with auto pollution? 4. Under what circumstances is a bus system more efficient than a fixed-rail system such as San Francisco's BART or Washington's Metro? 1 Are criminals rational? Is it possible to decrease crime by changing the expected benefits and costs of crime? 2. Why are crime rates relatively high in central cities? 3. What is the optimum amount of crime? 4. How do the police, the courts, and the prison system deter crime? 5. Do policies that control illegal drugs increase property crime? municipality. The urbanized area outside the central city is called the urban fringe. In 1990, there were 396 urbanized areas in the United States, containing 63.6 percent of the nation's population. Metropolitan Area. A metropolitan area (MA) is defined as the area containing a large population nucleus and the nearby communities that are integrated, in an economic sense, with the nucleus. Each metropolitan area contains either ( 1 ) a central city with at least 50,000 people or (2) an urbanized area. In the census definition, the nucleus of a metropolitan area is either the central city or the urbanized area, and the collected. In New England, where counties are relatively unimportant, metropolitan areas include the urbanized area and towns that are sufficiently integrated with the urban area. Most metropolitan areas include more than one county. A central county is defined as one in which ( 1 ) the majority o\' the population lives in the urbanized area on 2) at least 2.500 of its residents live in the central municipality. An adjacent county is included in the metropolitan area if it is sufficiently integrated with the central county or counties. The degree of integration is measured in terms of commuting Percent of U.S. Population Area Definition in Area in 1990 Urbanized areas: central cities and surrounding dense areas 63.6% Metropolitan areas: CMSAs and MSAs 77.5 Urban areas: urbanized areas and smaller urban places 75.2 The percentage living in metropolitan areas differs from the percentage in urbanized areas for two reasons. First, the metropolitan-area definition excludes people who live in urbanized areas with either a relatively small central city (less than 50.000) or a relatively small total population (less than 100,000 in the urbanized area and the integrated counties). Second, the metropolitan-area definition includes people who live outside urbanized areas (in the county containing the urbanized area or a county adjacent to it). The exclusion of people in small urbanized areas is outweighed by the inclusion of people outside urbanized areas, so the percentage of the population living in metropolitan areas exceeds the percentage in urbanized areas. This book uses three terms to refer to spatial concentrations of economic activity: urban area, metropolitan area, and city: These three terms, which will be used interchangeably, refer to the economic city (an area with a relatively high population density that contains a set of closely related activities), not the political city. When referring to a political city, the book will use the term central city or municipality. Discussion Questions 1. Suppose that you have the power to develop a new set of census definitions for urban and metropolitan areas. How would you define (a) a metropolitan area, (b) an urban resident, (c) a central city, and (</) a suburban area? 2. Consider a region in which all urbanized areas have populations of at least 100.000. Will the percentage of the region's population living in urbanized areas be less than or greater than the percentage living in metropolitan areas? 3. Between 1980 and the gap between the percentage of the population living in urbanized areas and the percentage of the population living in metropolitan areas decreased, from 14.8 percentage points (76.2 percent-61.4 percent) to 13.9 percentage points (77.5 percent-63.6 percent). Provide an explanation lot the narrowing of the gap. 4. Which of the three urban definitions used by the Census Bureau (urbanized area, urban place, metropolitan area) is closest to the economist's definition of a city? 5. In 1990, 86 percent of the population in the western states lived in urbanized areas, and 85 percent lived in metropolitan areas. In the same year, 79 percent of the population in the northeastern states lived in urbanized areas, and 88 percent lived in metropolitan areas. Why is the West more urbanized than the Northeast under the urbanized-area definition but less urbanized under the metropolitan-area definition? References U.S. Department of Commerce. "Appendix A: Area Classifications.** In 1990 Census of Population and Housing: Summary of Population and Housing Characteristics. Washington, D.C.: U.S. Government Printing Office, 1990. Defines all the geographical entities and concepts that are used in the 1990 census. See pages A-8 to A-13 for definitions of cities and metropolitan areas.