Rural and Arban Economics

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Rural and Arban Economics

• Aj. Suthep Nimsai

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Coming Attractions
Urban economics can be divide into six related
areas That correspond to the six part of this
book. These Are (1) market forces in the
development of cities, (2)Land use within
cities, (3) urban transportation, (4)
Urban problem and public policy, (5) housing and
Public policy , and (6) local government
expenditures
And taxes.
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Market Forces in theDevelopment of city
The first part of the book show how the location
decision of firm and households cause the
development of cities. A firm chooses the
location within a region that maximizes its
profit, and a household choose the location That
maximizes its utility. These location decision
generate clusters of activity (city) that differ
in size and Economics structure. The question
addressed in this part
of the book include the following
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• Why do cities exist ?
• Why are some cities so large, and other so small
  ?
• What causes urban economics growth and decline ?
• How do local government effect urban economics
  growth ?

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Land Use within Metropolitan Areas.
The second part of the book discusses the
spatial organization activities within cities.
To explain the observed pattern of land
use, we examine the intracity location choices of
firm and households. This part
addresses the following question.
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• What determines the price of land, and why do
  prices vary across space?
• Why are household in U.S. city segregated with
  respect to in come ?
• About 100 year ago, most large cities were
  monocentric, with most employment in the central
  core area. In todays employment is spread
  throughout the city, in the central core ,in
  suburban subcenters, and dispersed into suburban
  area. What economic forces caused this
  Transformation?

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4. What are the motivations for zoning and other
land use controls, and how do they affect the
urban economy?
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Urban Transportation
One of the responsibilities of government is to
provide an urban transportation system . Most
cities combine an auto-based highway system with
some form of mass transit (bus,light,or heavy
rail). Changes in the transportation system
effect the relative accessibility of different
sites, and thus affect land-use pattern. The
chapters on transportation address the following
question
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• What cause congestion, and what are the
  alternative policy responses?
• Why do most transit authorities have large
  deficits?
• Under what circumstances will a bus system be
  more efficient than a fixed rail system such as
  San Franciscos BART or Washington s Metro?
• Are light-rail systems efficient?

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Urban Problem and Public Policy
The fourth part of the book examines several
urban problem poverty, crime, and low
educational achievement and explores some
alternative policy response to these problems.
The incidence of poverty is lower inmetropolitan
area than in rural area, but metropolitan
poverty is heavily concentrated in central
cities. The chapters on urban problems address
the following question
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• Why do household in metropolitan areas sort
  themselves with respect to income,education level
  ,and race,and how does this sorting contribute to
  concentrations of poverty in central cities?
• Does the tendency for the poor to live close to
  one another make them even poorer?
• Why is educational achievement so low in certain
  neighborhoods in central cities, and what set of
  policies would raise achievement levels?
• Are criminal rational? How do they respond to
  changes in the certainty and severity of
  punishment?
• Why are crime rate higher in central cities?

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Housing and Public Policy
The next part of the book examines the urban
housing market and evaluates the merits of
various housing Policies. Housing choices are
linked to location choice Because housing is
immobile when a household chooses a location.
The two housing chapters address The following
question
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1.What makes housing different from other
commodities? 2. Why do the poor occupy used
housing? 3. What are the market effects of
housing policies? 4. What causes homelessness?
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Local Government Expenditures and Taxes
The last part of the book explores the economics
of Local government. Under the fragmented system
of local governments, most large metropolitan
areas have dozens of local governments,
including Municipalities, school districts, and
special districts. The chapters on local
government address the following question
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• What are the trade-offs associated with the
  fragmented system of local government?
• Does a system of voting based on majority rule
  produce efficient outcomes?
• Is a local property tax regressive or
  progressive?
• How do local governments respond to grants form a
  state or national government?

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• The End
• See you next class