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Configuration of cities: the effects of congestion cost and government

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  • Alonso Villar, Olga

Abstract

In this paper we have developed a model that explains the existence of metropolitan areas. We have obtained that increasing returns to scale and the existence of transportation cost are factors that favor agglomeration and, on the other hand, that congestion cost works against this agglomeration. Furthermore, the government can modify the values of several parameters and so it must decide what amount of resources to invest in congestion and transportation in order to reduce respective costs in such a way that society is better off.

Suggested Citation

  • Alonso Villar, Olga, 1996. "Configuration of cities: the effects of congestion cost and government," UC3M Working papers. Economics 7212, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:7212
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    References listed on IDEAS

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    1. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-656, September.
    2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    3. James E. Rauch, 1993. "Does History Matter Only When It Matters Little? The Case of City-Industry Location," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 843-867.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. Fujita, Masahisa, 1988. "A monopolistic competition model of spatial agglomeration : Differentiated product approach," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 87-124, February.
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    Cited by:

    1. Masahisa Fujita & Tomoya Mori, 2005. "Transport development and the evolution of economic geography," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 4(2), pages 129-156, August.
    2. Pablo Brañas-Garza & Javier Rodero Cosano & John R. Presley, 2002. "The North-South divide and house price islands: the case of CÓrdoba (Spain)," European Journal of Housing Policy, Taylor and Francis Journals, vol. 2(1), pages 45-63.
    3. Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.

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    Monopolistic competition;

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