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Regional specialization, urban hierarchy, and commuting costs

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  • TABUCHI, Takatoshi
  • THISSE, Jacques-François

Abstract

We consider an economic geography model of a new genre: all firms and workers are mobile and their agglomeration within a city generates rising urban costs through competition on a land market. When commuting costs are low (high), the industry tends to be agglomerated (dispersed). With two sectors, the same tendencies prevail for extreme commuting cost values, but richer patterns arise for intermediate values. When one good is perfectly mobile, the corresponding industry is partially dispersed and the other industry 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: a larger array of varieties of each good is produced within the same city.

Suggested Citation

  • TABUCHI, Takatoshi & THISSE, Jacques-François, 2003. "Regional specialization, urban hierarchy, and commuting costs," LIDAM Discussion Papers CORE 2003060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2003060
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    More about this item

    Keywords

    interregional mobility; intersectional mobility; agglomeration; commuting costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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