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Agglomeration, commuting costs, and the internal structure of cities

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  • Koster, Hans R.A.
  • Rouwendal, Jan

Abstract

Urban areas are characterized by dispersed employment patterns and mixed land use. Lucas and Rossi‐Hansberg (LRH) [Econometrica 70 (2002), 1445–1476] develop a model where the urban spatial structure is determined by the external benefits of agglomeration and the commuting costs for workers. This paper reviews and tests implications of the LRH-model for residential rents using semiparametric regression techniques. We show that in mixed urban areas, agglomeration is an important determinant of the rent, while in predominantly residential areas proximity to a business area significantly impacts rents, as is suggested by the theory.

Suggested Citation

  • Koster, Hans R.A. & Rouwendal, Jan, 2013. "Agglomeration, commuting costs, and the internal structure of cities," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 352-366.
  • Handle: RePEc:eee:regeco:v:43:y:2013:i:2:p:352-366
    DOI: 10.1016/j.regsciurbeco.2012.09.001
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    Cited by:

    1. Grover,Arti & Lall,Somik V., 2016. "Jobs in the city : explaining urban spatial structure in Kampala," Policy Research Working Paper Series 7655, The World Bank.
    2. Kantor, Yuval & Rietveld, Piet & van Ommeren, Jos, 2014. "Towards a general theory of mixed zones: The role of congestion," Journal of Urban Economics, Elsevier, vol. 83(C), pages 50-58.

    More about this item

    Keywords

    Agglomeration; Commuting; Rents; Mixed land use; Urban spatial structure; Semiparametric estimation;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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