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Optimal City Hierarchy: A Dynamic Programming Approach to Central Place Theory

  • Wen-Tai Hsu

    (Chinese University of Hong Kong)

  • Thomas J. Holmes

    (University of Minnesota)

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    It is an empirically plausible description of cities and is route to explain empirical regularities in city size distribution and industrial locations. This paper formalizes central place hierarchy by providing a rationale for it via a social planner's problem. The optimal city hierarchy is then compared with the equilibrium city hierarchy in Hsu (2008).

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    File URL: https://www.economicdynamics.org/meetpapers/2009/paper_342.pdf
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    Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 342.

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    Date of creation: 2009
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    Handle: RePEc:red:sed009:342
    Contact details of provider: Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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    1. Berliant, Marcus & Watanabe, Hiroki, 2008. "Explaining the Size Distribution of Cities: X-treme Economies," MPRA Paper 7090, University Library of Munich, Germany.
    2. Esteban Rossi-Hansberg & Mark L. J. Wright, 2003. "Urban structure and growth," Discussion Paper / Institute for Empirical Macroeconomics 141, Federal Reserve Bank of Minneapolis.
    3. Juan Carlos Cordoba, 2003. "On the Distribution of City Sizes," Urban/Regional 0302002, EconWPA.
    4. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August.
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