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Agglomeration, commuting costs, and the internal structure of cities

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  • Koster, Hans R.A.
  • Rouwendal, Jan
Abstract
Urban areas are characterized by dispersed employment patterns and mixed land use. Lucas and Rossi‐Hansberg (LRH) [Econometrica 70 (2002), 1445–1476] develop a model where the urban spatial structure is determined by the external benefits of agglomeration and the commuting costs for workers. This paper reviews and tests implications of the LRH-model for residential rents using semiparametric regression techniques. We show that in mixed urban areas, agglomeration is an important determinant of the rent, while in predominantly residential areas proximity to a business area significantly impacts rents, as is suggested by the theory.

Suggested Citation

  • Koster, Hans R.A. & Rouwendal, Jan, 2013. "Agglomeration, commuting costs, and the internal structure of cities," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 352-366.
    • Handle: RePEc:eee:regeco:v:43:y:2013:i:2:p:352-366
    DOI: 10.1016/j.regsciurbeco.2012.09.001
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    1. Honghu Sun & Feng Zhen & Yupei Jiang, 2020. "Study on the Characteristics of Urban Residents’ Commuting Behavior and Influencing Factors from the Perspective of Resilience Theory: Theoretical Construction and Empirical Analysis from Nanjing, Chi," IJERPH, MDPI, vol. 17(5), pages 1-17, February.
    2. Gerard H Dericks & Hans R A Koster, 2021. "The billion pound drop: the Blitz and agglomeration economies in London [The economics of density: evidence from the Berlin wall]," Journal of Economic Geography, Oxford University Press, vol. 21(6), pages 869-897.
    3. Paolo Veneri, 2018. "Urban spatial structure in OECD cities: Is urban population decentralising or clustering?," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 1355-1374, November.
    4. Du, Rui & Zheng, Siqi, 2020. "Agglomeration, housing affordability, and new firm formation: The role of subway network," Journal of Housing Economics, Elsevier, vol. 48(C).
    5. Cláudia A.Soares Machado & Mariana A. Giannotti & Juliana A. Kolling & Luiz A. Manfré & Eunice Barbosa & José Alberto Quintanilha, 2013. "Transportation System And Land Price: An Investigation About Its Relationship Based On Spatial Analysis," LARES lares_2013_784-1003-1-rv, Latin American Real Estate Society (LARES).
    6. Grover,Arti & Lall,Somik V., 2016. "Jobs in the city : explaining urban spatial structure in Kampala," Policy Research Working Paper Series 7655, The World Bank.
    7. Kantor, Yuval & Rietveld, Piet & van Ommeren, Jos, 2014. "Towards a general theory of mixed zones: The role of congestion," Journal of Urban Economics, Elsevier, vol. 83(C), pages 50-58.
    8. Andrés Domínguez, 2021. "Homicide rates and housing prices in Cali and Bogotá, D. C," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 40(83), pages 643-677, August.
    9. Xu, Shu-Xian & Liu, Tian-Liang & Huang, Hai-Jun & Wang, David Z.W., 2021. "Optimizing the number of employment subcenters to decentralize a congested city," Regional Science and Urban Economics, Elsevier, vol. 90(C).
    10. Garrido-da-Silva, Liliana & Castro, Sofia B.S.D. & Correia-da-Silva, João, 2022. "Location of housing and industry around city centre amenities," Regional Science and Urban Economics, Elsevier, vol. 95(C).

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    More about this item

    Keywords

    Agglomeration; Commuting; Rents; Mixed land use; Urban spatial structure; Semiparametric estimation;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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