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The Optimum Factory Town

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  • Avinash Dixit

Abstract

This paper studies the determination of the optimum size and arrangement of a monocentric city,. The major consideration is the trade-off between economies of scale in production in the central business district and the diseconomies of congestion in commuter transport. Planned optimum allocations and their decentralized implementation by suitable taxes and transfers are discussed. Rent and density profiles and land use are solved in closed form, and complete numerical solutions are obtained for particular parameter values. It is shown that negative exponential rent and density profiles may not be very good approximations, and that cities of more than a million inhabitants are difficult to justify in the framework considered.

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Bibliographic Info

Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 4 (1973)
Issue (Month): 2 (Autumn)
Pages: 637-654

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Handle: RePEc:rje:bellje:v:4:y:1973:i:autumn:p:637-654

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Cited by:
  1. John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
  2. Vincent Boitier, 2013. "Endogenous city size in urban search models: the case of high reallocation costs," ERSA conference papers ersa13p590, European Regional Science Association.
  3. Ksenia Gonchar & Tatyana Ratnikova, 2012. "Explaining the Productivity Advantages of Manufacturing Firms in Russian Urban Agglomerations," HSE Working papers WP BRP 22/EC/2012, National Research University Higher School of Economics.
  4. Robert E. Lucas, Jr., 2001. "Externalities and Cities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 245-274, April.
  5. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
  6. Ksenia Gonchar & Tatyana Ratnikova, 2013. "Explaining the productivity advantages of manufacturing firms in Russian urban agglomerations," ERSA conference papers ersa13p123, European Regional Science Association.

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