Cities and Their Vital Systems Infrastructure Past, Present, and Future (1988) / Chapter Skim
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5 An Economic Model of Urban Growth
5 An Economic Model of Urban Growth
Pages 98-107
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From page 98... ...
The urban infrastructure is one of the most diverse and complex. To name only the most important components, it includes streets and public transportation; water supply and sewage removal; police and fire protection; judicial, educational, and health facilities; and parks and other recreational facilities.
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From page 99... ...
Cities that serve as supply points to distant markets produce specialized products from specialized resources. When such production is concentrated in only a few cities, it is usually because of economies of scale; the joint location of several related specialized activities arises from agglomeration economies that is, economies of joint locationwherein producers use each other's products or related or joint facilities
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From page 100... ...
In mining, growth results from the more or less accidental discovery of extractable resources, and decline occurs when the resources are depleted or sudden shifts of demand take place. In defense work, growth is mainly due to political decisions about where to locate defense contracts.
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From page 101... ...
As it turns out, this is sufficiently challenging and can serve as a first step in the direction of a full analysis of economic growth in a spatial economy. Our main concern is in determining the relative growth rates of the urban and rural population.
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From page 102... ...
The question of the development of the spatial economy can thus be shown to be equivalent to studying a growth process in a two-sector economy in which an urban good is produced with increasing returns to scale and an agricultural good is produced with decreasing returns to scale. If we assume that the market achieves an efficient allocation of total available labor between urban and agricultural production, we find that urban population increases relative to rural population as total population grows.
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From page 103... ...
FIGURE 5-2 Urban population as a fraction of total population in the United States, 1790-1980. Data source: U.S.
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From page 104... ...
~ output of agricultural product per unit of land (a CobbDouglas function) ZO aggregate agricultural output delivered to the city XO aggregate labor input into agriculture T aggregate transportation input Z1 = b1 Lid aggregate output of the urban good as a function of urban labor input LO These aggregates depend on the density of labor Output: rR ZO = Jo Herr bx~(r~dr Labor input: Transportation input: input Fir)
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From page 105... ...
Finally, consider the allocation of a fixed amount Lo of labor to agricultural production and transportation: or 2 - 206 Max B . X30-2~ T3-2~ Xo,T such that Xo + TCLo The efficiency conditions for this simple constrained maximum problem are
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From page 106... ...
We assume that the market achieves an efficient allocation of total available labor L between urban and agricultural production. Economic theory shows that this is true under perfect competition.
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From page 107... ...
Then by = 95/87 = 1.097954. Urban population as a fraction of total population may be calculated from equation 18 for different levels of total population.
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