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Land development, search frictions and city structure

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  • Sato, Yasuhiro
  • Xiao, Wei

Abstract

This paper analyzes the interactions between labor and housing (and land) markets in a city. We develop a monocentric city model involving land development and frictional unemployment and characterize the city's spatial configurations in equilibrium. To better understand the properties of equilibria, we implement a comparative steady state analysis. Further, we explore the effects of policies such as (a) a tax on land development to subsidize residents' consumption, (b) a subsidy to improve the transportation infrastructure financed by a lump-sum tax, and (c) income transfers from employed to unemployed workers. Finally, we provide an extension wherein the job arrival rate is endogenous and depends on distance to jobs.

Suggested Citation

  • Sato, Yasuhiro & Xiao, Wei, 2015. "Land development, search frictions and city structure," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 63-76.
    • Handle: RePEc:eee:regeco:v:50:y:2015:i:c:p:63-76
    DOI: 10.1016/j.regsciurbeco.2014.10.005
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    Cited by:

    1. Daisy J. Huang & Charles Ka Yui Leung & Chung-Yi Tse, 2018. "What Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 57(3), pages 431-475, October.
    2. Boitier, Vincent, 2018. "The role of labor market structure in urban sprawl," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 83-98.
    3. Viguié, Vincent & Liotta, Charlotte & Pfeiffer, Basile & Coulombel, Nicolas, 2023. "Can public transport improve accessibility for the poor over the long term? Empirical evidence in Paris, 1968–2010," Journal of Transport Geography, Elsevier, vol. 106(C).
    4. Dong, Tao & Jia, Ning & Ma, Shoufeng & Xu, Shu-Xian & Ping Ong, Ghim & Liu, Peng & Huang, Hai-Jun, 2022. "Impacts of intercity commuting on travel characteristics and urban performances in a two-city system," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    5. Wei Xiao & Wenhua Liu & Chunzhi Li, 2022. "Can the urban spatial structure accelerate urban employment growth? Evidence from China," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1668-1693, December.
    6. repec:grm:ecoyun:202103 is not listed on IDEAS

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    More about this item

    Keywords

    Land development; City structure; Search frictions; Spatial mismatch;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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