Urban Structures with Forward and Backward Linkages

in Regional Science and Urban Economics (2020), 59(3), 480-507

We study urban structures driven by demand and vertical linkages in the presence of increasing returns to scale. Individuals consume urban varieties and firms use these varieties to produce a national ... [more ▼]

We study urban structures driven by demand and vertical linkages in the presence of increasing returns to scale. Individuals consume urban varieties and firms use these varieties to produce a national good. We prove the existence of a spatial equilibrium and obtain an invariance result according to which more intense demand or vertical linkages have the same effect on the urban structure as lower commuting costs. Various urban configurations can emerge exhibiting a monocentric, an integrated, a duocentric, or a partially integrated city structure. We discuss the role of commuting and transport costs, demand and vertical linkages, and urbanization in shaping these patterns. We show that multiple equilibria may arise involving the monocentric city and up to a couple of duocentric and partially integrated structures. [less ▲]

Equilibrium and first-best city with endogenous exposure to local air pollution from traffic

in Regional Science and Urban Economics (2017), 62

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and ... [more ▼]

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and investigates the feedback effect of endogenous pollution on residential choices. The presence of stronger traffic-induced air pollution exposure reduces the geographical extent and the population of cities. Land rents fall with distance from the city center while population densities may be non-monotonic. Cleaner vehicle technologies reduce pollution exposure everywhere, increase population and density everywhere and do not affect the spatial extent of the city. The paper compares the urban equilibrium with the first-best. The first-best structure is a less expanded city with higher densities at the center and lower densities at the fringe. [less ▲]

Where and When to Invest in Infrastructure

in Regional Science and Urban Economics (2014)

This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the ... [more ▼]

This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the investment, doing so under imperfect observability of the investment gains. The two models considered in the paper differ in the source of the imperfection. In the signal model, the imperfection comes from imperfect observability of initial income gains from the investment, while in the option model, it comes from the stochastic nature of the income gains in the second period. In addition to providing the first treatment of this type of problem, the analysis shows that the influences of underlying parameters on whether or not the government waits to invest are similar in the two models. [less ▲]

Firms' locations under demand heterogeneity

in Regional Science and Urban Economics (2012), 42(6), 961-974

In this paper we build an economic geography model where rms sell product varieties with heterogenous demands. We show that rms selling the products with higher demands select to set up their plants in ... [more ▼]

In this paper we build an economic geography model where rms sell product varieties with heterogenous demands. We show that rms selling the products with higher demands select to set up their plants in larger countries. Larger countries do not only get better access to more varieties but also to the most demanded and valuable ones. The impact of such a spatial selection on fi rms location choice depends on the skewness of the distribution of demand intensity across varieties. In a model where only capital moves across regions, demand heterogeneity generally diminishes the amount of capital invested in the larger country. In a model where the work force moves across regions, demand heterogeneity is shown to eliminate dramatic changes in the location patterns and to result in the asymmetric dispersion of workers, rather their symmetric dispersion or complete agglomeration in a specic region. [less ▲]

Spatial configurations in a periurban city: a cellular automata-based microeconomic model

in Regional Science and Urban Economics (2007), 37(5), 542-567

This paper presents a microeconomic model of residential location that explores the emergence of a mixed belt where residents and farmers coexist beyond a city. The model is based on integrating urban ... [more ▼]

This paper presents a microeconomic model of residential location that explores the emergence of a mixed belt where residents and farmers coexist beyond a city. The model is based on integrating urban economics with cellular automata in order to simulate equilibrium patterns in 2D and through time. Households commute to a CBD and enjoy neighbourhood externalities that are a function of both local residential density and farmland, or open space. They bid on the competitive land market and locate so as to maximize utility. Incremental population growth changes the neighbourhood and leads to rent adaptations. With appropriate parameter values a mixed belt may emerge between the urban and agricultural specialized areas. Settlements within this mixed area are more or less clustered or scattered depending on preferences and neighbourhood size. [less ▲]

Attribute dependence and the provision of quality

in Regional Science and Urban Economics (2001), 31(5), 547-569

A quality improvement often necessitates modifications of varietal product features. This paper studies firms’ incentives to provide quality when this decision affects the goods’ degree of horizontal ... [more ▼]

A quality improvement often necessitates modifications of varietal product features. This paper studies firms’ incentives to provide quality when this decision affects the goods’ degree of horizontal differentiation. Intuitively, one is inclined to argue that private incentives to provide quality are insufficient relative to the social optimum if a quality improvement reduces horizontal differentiation. We find that this argument depends on whether the game is simultaneous or sequential. In the former case private incentives prove excessive relative to the social optimum, and in the latter case, insufficient. As a result, a regulator might want to impose either minimum or maximum quality standards.<P>(This abstract was borrowed from another version of this item.) [less ▲]