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The Optimum Factory Town

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Author Info
Avinash Dixit

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Abstract

This paper studies the determination of the optimum size and arrangement of a monocentric city,. The major consideration is the trade-off between economies of scale in production in the central business district and the diseconomies of congestion in commuter transport. Planned optimum allocations and their decentralized implementation by suitable taxes and transfers are discussed. Rent and density profiles and land use are solved in closed form, and complete numerical solutions are obtained for particular parameter values. It is shown that negative exponential rent and density profiles may not be very good approximations, and that cities of more than a million inhabitants are difficult to justify in the framework considered.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 4 (1973)
Issue (Month): 2 (Autumn)
Pages: 637-654
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Handle: RePEc:rje:bellje:v:4:y:1973:i:autumn:p:637-654

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  1. Esteban Rossi-Hansberg, 2004. "Optimal Urban Land Use and Zoning," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 69-106, January. [Downloadable!] (restricted)
  2. Quigley, John M, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-38, Spring. [Downloadable!] (restricted)
  3. Christopher H. Wheeler, 2003. "Evidence on agglomeration economies, diseconomies, and growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 79-104. [Downloadable!]
  4. Christopher H. Wheeler, 2004. "Productivity and the geographic concentration of industry: the role of plant scale," Working Papers 2004-024, Federal Reserve Bank of St. Louis. [Downloadable!]
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  5. Robert E. Lucas, Jr., 2001. "Externalities and Cities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 245-274, April. [Downloadable!] (restricted)
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