Shrinking Cities!

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Shrinking Cities!
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Define

• Small cities -- Population between 100,000 and
  500,000
• Large cities -- Population gt 500,000
• Since 1950 total population of small cities has
  been growing faster than that of large cities.

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Cumulative Pop. (millions)
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Population Losses

• They have been significant -- in the hundreds of
  thousands in NY, Chicago, Detroit, Philadelphia,
  Cleveland, St. Louis.
• They have generally been in metro areas that have
  been growing.
• Look at pop_90_00.xls spreadsheet

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Some Turnaround in 1990s
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Vertical and Horizontal

• Older cities were vertical. Discuss.
• Newer cities are horizontal. Discuss.

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Are Cities Like Shopping Malls

• Vacancies -- What do you do?
• Lower rents?
• Offer tax breaks?
• Close the mall?
• Can you close a city?

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Managing shrinkage

• Is shrinkage necessarily bad?
• What about regional government?
• What do we do with empty tracts of land?

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Radical proposal

• De-annex part of their cities to private
  developers to create a smaller, more viable city.
  How?
• Provide funds to (now) smaller city.
• Reduce costs to (now) smaller city.
• Lead (possibly) to quicker development than if
  they were parts of the larger city
• What do you think?

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Central Place Theory

• Within a region, youll have a set of cities
• Some BIG ones
• Some smaller ones
• Some tiny ones
• How many cities will develop?
• Why are some larger than others?

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Central Place Theory

• Suppose, within a region, you have three consumer
  products
• CDs
• Pizzas
• Jewelry
• What are their characteristics?

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What does our region look like?

• Uniform density -- 80,000 people
• No shopping externalities
• Ubiquitous inputs
• Uniform demand

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Technologies for Stores

• Jewelry -- Operates at larger scale ? 1
  store/80,000 people ? 1 store in region.
• Compact disks ? 1 store/20,000 people ? 4 stores
  in region
• Pizza ? 1 store/5,000 people ? 16 stores in region

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City S 1 Pizza
City S 1 Pizza
City S 1 Pizza
City S 1 Pizza
City L 1 Jeweler 2 CD 4 Pizza
City M 1 CD 2 Pizza
City M 1 CD 2 Pizza
5000
10000
20000
City S 1 Pizza
City S 1 Pizza
City S 1 Pizza
City S 1 Pizza
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Hierarchy of Cities

• Larger city ? larger variety of goods sold
• People in S cities shop in M and L cities, but
  people in L cities shop only in L cities Why?
• If we have increasing economies in producing
  pizzas, what will happen to small cities?

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Thoughts

• Go over Exercises and Discussion Questions. I
  will almost certainly use them on exams.
• Next time, we move on to Chapter 7. Well
  backtrack to Chapter 6 a little later in the term.