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Nonoptimal Levels of Suburbanization

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  • Philip E Graves

    (Department of Economics UCB 256, University of Colorado, Boulder, CO 80309-0256, USA)

Abstract

Suburbanization has many causes, among which is the attempt to relocate to acquire a more desirable vector of local public goods. The traditional economists' procedure for valuing public goods involves vertical aggregation of marginal willingness to pay, at a given income level. This approach is flawed by failing to recognize that individuals will not work for goods that cannot be acquired individually with higher incomes. There will be a parallel input market failure any time there is a public good output market failure, thus the ‘given income’ of the traditional valuation method is too low. Hence, traditional valuation methods result in underprovision of local public goods (for example, parks, safety, education, and environmental quality) at the urban centers. As a consequence, there will be nonoptimally large levels of suburban sprawl with substantial resulting welfare loss.

Suggested Citation

  • Philip E Graves, 2003. "Nonoptimal Levels of Suburbanization," Environment and Planning A, , vol. 35(2), pages 191-198, February.
    • Handle: RePEc:sae:envira:v:35:y:2003:i:2:p:191-198
    DOI: 10.1068/a3577
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    References listed on IDEAS

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    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455.
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    Cited by:

    1. Graves, Philip E., 2017. "Global Climate Policy Will Have Net Benefits Larger Than Anyone Thinks (and Welfare Gains, Strangely, Are Likely To Be Much Larger Yet)," Ecological Economics, Elsevier, vol. 136(C), pages 73-76.
    2. Cheshire, Paul & Sheppard, Stephen, 2004. "Land markets and land market regulation: progress towards understanding," Regional Science and Urban Economics, Elsevier, vol. 34(6), pages 619-637, November.

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