New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity

ABSTRACT We review the usefulness of urban spatial economic models of land use change for the study and policy analysis of spatial land use–environment interactions. We find that meaningful progress has been made in econometric and monocentric models extended to account for multiple sources of spatial heterogeneity and in the development of general equilibrium models with spatial dynamics. Despite these advances, more work is needed in developing models with greater realism. Most agent‐based computational models of urban land use change currently lack economic fundamentals, but provide a flexible means of linking microlevel behavior and interactions with macrolevel land use dynamics. In combination with empirical methods to identify parameters, this framework provides a promising approach to modeling spatial land use dynamics and policy effects.