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Accuracy and efficiency in simulating equilibrium land-use patterns for self-organizing cities

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  • Xiaofang Dong
  • Stephen L. Ross

Abstract

Lucas and Rossi-Hansberg (L&RH) (2002, Econometrica, 70: 1445–1476) and Fujita and Ogawa (F&O) (1982, Regional Science and Urban Economics, 12: 161–196, 1989, Environment and Planning A, 21: 363–374) develop urban models in which economic activity self-organizes due to spillovers in production. However, F&O (1982, Regional Science and Urban Economics, 12: 161–196, 1989, Environment and Planning A, 21: 363–374) show that rents and employment density are flat or falling as the city center is approached, while in the simulations of L&RH (2002, Econometrica, 70: 1445–1476), rents rise at an increasing rate toward the center suggesting a concentration of employment near the center. For the Lucas and Rossi-Hansberg model, we prove that land rents and density must be flat or falling near the center. We explain how using a polar coordinate system when approximating a two-dimensional integral can create systematic imprecision in their simulations, and then present revised simulations. The proofs and simulations suggest that in urban models where economic activity self-organizes firms do not unduly cluster at the center of a central business district even in monocentric equilibria.

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  • Xiaofang Dong & Stephen L. Ross, 2015. "Accuracy and efficiency in simulating equilibrium land-use patterns for self-organizing cities," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 707-722.
    • Handle: RePEc:oup:jecgeo:v:15:y:2015:i:4:p:707-722.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbu044
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    Cited by:

    1. Mossay, Pascal & Picard, Pierre M. & Tabuchi, Takatoshi, 2020. "Urban structures with forward and backward linkages," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    2. Satyajit Chatterjee & Burcu Eyigungor, 2017. "A Tractable City Model For Aggregative Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(1), pages 127-155, February.
    3. Marcus Berliant & Takatoshi Tabuchi, 2018. "Equilibrium commuting," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 609-627, May.
    4. Brinkman, Jeffrey C., 2016. "Congestion, agglomeration, and the structure of cities," Journal of Urban Economics, Elsevier, vol. 94(C), pages 13-31.
    5. Pan, Haozhi & Deal, Brian & Chen, Yan & Hewings, Geoffrey, 2018. "A Reassessment of urban structure and land-use patterns: distance to CBD or network-based? — Evidence from Chicago," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 215-228.
    6. Zhang, Wenjia & Kockelman, Kara M., 2016. "Optimal policies in cities with congestion and agglomeration externalities: Congestion tolls, labor subsidies, and place-based strategies," Journal of Urban Economics, Elsevier, vol. 95(C), pages 64-86.

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