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Search Frictions, Unemployment, And Housing In Cities: Theory And Policies

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  • Wei Xiao

Abstract

type="main"> We propose an urban search-matching model with land development. Wages, unemployment, prices of housing and land are endogenously determined. We characterize the steady-state equilibrium and then discuss the issue of efficiency. To explore interactions among markets, we implement comparative static analysis. We also consider three policies: an entry-cost policy that reduces firms' entry, a transportation policy that reduces commuting costs, and a housing policy that decreases rental prices. We find that the transportation and housing policies are more efficient if the unemployment rate is low, while the entry-cost policy is more efficient if the unemployment rate is high.

Suggested Citation

  • Wei Xiao, 2014. "Search Frictions, Unemployment, And Housing In Cities: Theory And Policies," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 422-449, June.
    • Handle: RePEc:bla:jregsc:v:54:y:2014:i:3:p:422-449
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    Cited by:

    1. Daisy J. Huang & Charles Ka Yui Leung & Chung-Yi Tse, 2018. "What Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 57(3), pages 431-475, October.
    2. Marchiori, Luca & Pascal, Julien & Pierrard, Olivier, 2023. "(In)efficient commuting and migration choices: Theory and policy in an urban search model," Regional Science and Urban Economics, Elsevier, vol. 102(C).
    3. Héctor M. Posada & Ana I. Moreno-Monroy, 2017. "Informality, city structure and rural–urban migration in Latin America," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 345-369, September.
    4. Wei Xiao & Wenhua Liu & Chunzhi Li, 2022. "Can the urban spatial structure accelerate urban employment growth? Evidence from China," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1668-1693, December.
    5. Boitier, Vincent, 2018. "The role of labor market structure in urban sprawl," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 83-98.
    6. Sato, Yasuhiro & Xiao, Wei, 2015. "Land development, search frictions and city structure," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 63-76.

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