Economic and Fiscal Impacts of Metropolitan Decentralization: The Southern California Case

This paper employs a matrix version of the Lowry model to generate spatially disaggregated employment and population impacts. The model is used to study the effects of the decentralization of basic employment in the Los Angeles metropolitan region from its central core to a suburban location in Orange County. Advantage is taken of the fact that the study region comprises a large number of separate fiscal jurisdictions, and so the model is extended to measure the fiscal impacts of the derived population and employment changes associated with this decentralization. It is shown that net impacts hide significant gross expansions and declines that occur at the geographically disaggregated level. The relocation of a given number of basic jobs from Los Angeles to peripheral Orange County has a marked impact on jobs, population, and public expenditures in individual cities, depending on their relative proximity to the sources of basic-employment change. Although the relationship between the central city and the suburbs is highly competitive, the central city may gain from spatial-multiplier impacts if the suburbs (especially close-in suburbs) attract jobs from outside the region.