Land development, search frictions, and city structure
AbstractThis paper analyzes the interactions between labor and housing (and land) markets in a city. We develop a monocentric city model involving land development and frictional unemployment. Unemployment, the spatial structure of a city, land development, housing demand, prices of housing and land are all endogenously determined in the model. We then characterize two different spatial configurations, spatial mismatch equilibrium in which unemployed workers are located far from jobs and integrated equilibrium in which unemployed workers live in areas close to jobs. To better understand how two equilibria are affected by labor market parameters, such as search intensity, wage, job finding rate, job destruction rate, and so on, we implement a comparative steady state analysis. We further explored the effects of policies such as a tax on land development to subsidize residents, a subsidy to reduce residentsf commuting costs, and a subsidy to improve unemployed workersf benefits.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 13-12.
Length: 42 pages
Date of creation: Jun 2013
Date of revision:
Land development; City structure; Search frictions; Spatial mismatch;
Find related papers by JEL classification:
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-06-30 (Agricultural Economics)
- NEP-ALL-2013-06-30 (All new papers)
- NEP-URE-2013-06-30 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens, 2010.
Journal of Political Economy,
University of Chicago Press, vol. 118(3), pages 485-535, 06.
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- Wheaton, William C., 1976. "On the optimal distribution of income among cities," Journal of Urban Economics, Elsevier, vol. 3(1), pages 31-44, January.
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