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Regional Specialization, Urban Hierarchy, And Commuting Costs

  • Takatoshi Tabuchi
  • Jacques-François Thisse

We consider an economic geography model of a new genre: All firms and workers are mobile and their agglomeration within a city generates costs through competition on a housing market. In the case of two sectors, contrasted patterns arise. When one good is perfectly mobile, the corresponding industry is partially dispersed whereas the other is agglomerated, thus showing regional specialization. When one sector supplies a nontradeable consumption good, this sector is more agglomerated than the other. The corresponding equilibrium involves an urban hierarchy in that a larger array of varieties of the two goods is produced within the same city. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 47 (2006)
Issue (Month): 4 (November)
Pages: 1295-1317

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Handle: RePEc:ier:iecrev:v:47:y:2006:i:4:p:1295-1317
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  1. Takatoshi Tabuchi, 2001. "On Interregional Price Differentials," The Japanese Economic Review, Japanese Economic Association, vol. 52(1), pages 104-115.
  2. Keith Head & Thierry Mayer, 2004. "Non-Europe : the magnitude and causes of market fragmentation in the EU," Cahiers de la Maison des Sciences Economiques bla99004a, Université Panthéon-Sorbonne (Paris 1).
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