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Water-Price Differential and the Efficient Population Size and Urban-Rural Composition of a Distant, Large, Arid Island

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Abstract

A low population density and a large distance from civilization centres present a high degree of isolation to the island's residents. Immigration can reduce the mental and material costs of isolation for the veteran residents, but at the expense of cultural and national cohesion and social harmony; and, in the case of an arid land, also at the expense of the amount and price of water allocated to agriculture. An expected-net-benefit-maximisation model for determining population size and its equilibrium urban-rural composition is developed. It is simulated for various agricultural water prices. The simulation results illustrate the central role of the effect of immigration on the urban unemployment rate in the determination of the island's efficient population size.

Suggested Citation

  • Levy, Amnon & Zamani, Reza, 2004. "Water-Price Differential and the Efficient Population Size and Urban-Rural Composition of a Distant, Large, Arid Island," Economics Working Papers wp04-17, School of Economics, University of Wollongong, NSW, Australia.
    • Handle: RePEc:uow:depec1:wp04-17
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    References listed on IDEAS

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    1. Todaro, Michael P, 1969. "A Model for Labor Migration and Urban Unemployment in Less Developed Countries," American Economic Review, American Economic Association, vol. 59(1), pages 138-148, March.
    2. Harry Clarke, 2003. "Should Australia Target Its Population Size?," Economic Papers, The Economic Society of Australia, vol. 22(1), pages 24-35, March.
    3. Theodore W. Schultz, 1962. "Reflections on Investment in Man," NBER Chapters, in: Investment in Human Beings, pages 1-8, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Population density; efficient population size; simulation;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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