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A Simple Theory of Smart Growth and Sprawl

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  • Matthew Allen Turner

Abstract

This paper considers the simultaneous determination of residential density and the supply of local versus remote retail services. Possible equilibrium development patterns either correspond closely to what anti-sprawl activists describe as smart growth, or to its opposite. Equilibrium and optimal patterns of development do not always coincide. When equilibrium and optimal patterns of development diverge, optimal density is always discretely (as opposed to marginally) higher than equilibrium density. This occurs in the absence of congestion externalities, and is due to a free-rider problem and a coordination problem. The analysis indicates that a tax on large lots or a subsidy for small lots may be welfare improving under certain conditions.

Suggested Citation

  • Matthew Allen Turner, 2006. "A Simple Theory of Smart Growth and Sprawl," Working Papers tecipa-208, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-208
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    References listed on IDEAS

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    1. Berliant, Marcus & Konishi, Hideo, 2000. "The endogenous formation of a city: population agglomeration and marketplaces in a location-specific production economy," Regional Science and Urban Economics, Elsevier, vol. 30(3), pages 289-324, May.
    2. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
    3. Scotchmer, Suzanne, 2002. "Local public goods and clubs," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 29, pages 1997-2042 Elsevier.
    4. Henderson, Vernon & Mitra, Arindam, 1996. "The new urban landscape: Developers and edge cities," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 613-643, December.
    5. Marcy Burchfield & Henry G. Overman & Diego Puga & Matthew A. Turner, 2006. "Causes of Sprawl: A Portrait from Space," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 587-633.
    6. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    7. Turner, Matthew A., 2005. "Landscape preferences and patterns of residential development," Journal of Urban Economics, Elsevier, vol. 57(1), pages 19-54, January.
    8. Berliant, Marcus & Fujita, Masahisa, 1992. "Alonso's Discrete Population Model of Land Use: Efficient Allocations and Competitive Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 535-566, August.
    9. Brueckner, Jan K., 1987. "The structure of urban equilibria: A unified treatment of the muth-mills model," Handbook of Regional and Urban Economics,in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 20, pages 821-845 Elsevier.
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    Cited by:

    1. Berg, Nathan, 2008. "Imitation in location choice," MPRA Paper 26592, University Library of Munich, Germany.
    2. Lambert, Thomas & Catchen, James, 2013. "The Impact of Urban Sprawl on Disaster Relief Spending: An Exploratory Study," MPRA Paper 51887, University Library of Munich, Germany.
    3. Daniel Czamanski & Rafael Roth, 2011. "Characteristic time, developers’ behavior and leapfrogging dynamics of high-rise buildings," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(1), pages 101-118, February.
    4. Daniel Arribas-Bel & Peter Nijkamp & Henk Scholten, 2011. "Multi-Dimensional Urban Sprawl in Europe: a Self-Organizing Map Approach," ERSA conference papers ersa10p485, European Regional Science Association.
    5. Neeraj Baruah & J. Vernon Henderson & Cong Peng, 2017. "Colonial Legacies: Shaping African Cities," SERC Discussion Papers 0226, Spatial Economics Research Centre, LSE.
    6. Caviglia-Harris, Jill L. & Harris, Daniel, 2011. "The Impact of Settlement Design on Tropical Deforestation Rates and Resulting Land Cover Patterns," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(3), December.

    More about this item

    Keywords

    urban sprawl; residential land use; lot size; retail location; urban economics;

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • H0 - Public Economics - - General

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