The authors detail an urban economics experiment that is easily run in the classroom. The experiment has a flexible design that allows the instructor to explore how congestion, zoning, public transportation, and taxation levels determine the bid-rent function. Heterogeneous agents in the experiment compete for land use utilizing a simple auction mechanism. Using the data that is collected, a bid-rent function is derived, and the experimental treatment is altered over the course of three sessions to uncover core concepts in urban economics. Moreover, this provides a tangible experience that can be used to help undergraduates relate to urban issues such as the steep rent gradient found around many larger colleges and universities.
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Find related papers by JEL classification: A22 - General Economics and Teaching - - Economics Education and Teaching of Economics - - - Undergraduate R1 - Urban, Rural, and Regional Economics - - General Regional Economics C9 - Mathematical and Quantitative Methods - - Design of Experiments
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