Internal structure of consumer cities: Core and subcenters

This study examines urban spatial structures with production externalities as well as agglomeration from consumption amenities. Two agglomeration forces interact in consumer cities where a variety of nontradable goods facilitate consumption. I show that higher urban density begets not only more efficient production but also more varieties for consumers to enjoy. Hence, an urban structure depends on the tension between firms and consumers to take advantage of urban density. As a result, production externalities may cause decentralization from the central business districts, reflecting suburbanization. On the other hand, consumer trips play a role in centralization to the market centers. Accordingly, the consumption agglomeration in big cities sheds light on the reexamination of the significance of city cores.