Urban Guide

Econ 460 Urban Economics

Lecture 4: Epilogue

Instructor: Hiroki WatanabeSummer 2012

© 2012 Hiroki Watanabe 1 /13

Urban Guide

1 Urban GuideWhere We StartedFrom Here on out — US Cities vs European Cities

© 2012 Hiroki Watanabe 2 /13

Urban Guide

Where We Started

© 2012 Hiroki Watanabe 3 /13

Urban Guide

Where We Started

1st / 2nd natureInterurban relationship betw bright areasInterrelationship betw bright and dark areasOverall distribution of citiesIntraurban relationship inside the dotTransportation

© 2012 Hiroki Watanabe 4 /13

Urban Guide

From Here on out — US Cities vs European Cities

We focused on US cities.Mathematical models can go wrong only when:

1 you start with a wrong set of assumptions2 you make a mistake in derivation

What assumption is violated in a city?European cities for example.Why are they so centralized?

© 2012 Hiroki Watanabe 5 /13

Urban Guide

From Here on out — US Cities vs European Cities

Muth-Mills condition: the slope of bid-rent functionis given by

dp(r)

dr=−ts(r)

.

Example 4.1 in Lecture 1A:

dn(r)/dr

n(r)= −t.

Bid rent drops 100t% every mile (bid-rent gradient).

© 2012 Hiroki Watanabe 6 /13

Urban Guide

From Here on out — US Cities vs European Cities

0 0.2 0.4 0.6 0.8 10

0.5

1

1.5

2

2.5

Distance r from CBD

Pop

ulat

ion

Population under Different Transportation Cost

n(r)|t=1

n(r)|t=2

0 0.2 0.4 0.6 0.8 10

0.5

1

1.5

2

2.5

Distance r from CBD

Pop

ulat

ion

Population under Different Transportation Cost

© 2012 Hiroki Watanabe 7 /13

Urban Guide

From Here on out — US Cities vs European Cities

1 US t:60-80: Extensive highway system installedComparatively low gas costLow commuting cost

2 European t:Not as far-reaching as the US counterpart

© 2012 Hiroki Watanabe 8 /13

Urban Guide

From Here on out — US Cities vs European Cities

Taste differences:US Higher preferences for large space size

Europe Appreciates amenitiesFinancing public school:

US Local property tax on housing (filteringeffect)

Paris The entire city is in the same schooldistrict

© 2012 Hiroki Watanabe 9 /13

Urban Guide

From Here on out — US Cities vs European Cities

How about other cities?460 is yours to keep now. Ask: Which modelapplies? What assumption is consistent?

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Urban Guide

Map du Jour

Source www.motherboard.tv/2010/12/14/facebook-world-a-map-of-the-social-graph

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Urban Guide

Index

bid-rent function, 6filtering effect, 9Muth-Mills condition, 6

property tax, 9school district, 9

© 2012 Hiroki Watanabe 12 /13

Urban Guide

Credit Where Credit Is Due

Special thanks toFujita sensei and Professor Berliant for inspirationA couple of characters I borrowed from NBCDottie and Beth at Teaching Center for educationalsupportJessica for administrative supportMy roommate’s cat Lola for constant distractionTwo cheesecakes I baked during this semester forstress reliefLast but not least, 6 devoted urbanites for strongcommitment

The End ☺

© 2012 Hiroki Watanabe 13 /13