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Discrete Choice Theory and the General Equilibrium of Employment, Housing, and Travel Networks in a Lowry-Type Model of the Urban Economy

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  • A Anas

    (Department of Civil Engineering, Northwestern University, Evanston, IL 60201, USA)

Abstract

Five influential paradigms established by Beckmann, Lowry, Wilson, Mills, and McFadden are unified by developing a long-run economic general equilibrium model of urban land-use based on probabilistic discrete choice theory. The model takes into account the interdependence of export-oriented and service employment with population. Households' choices of employment type, employment location, type and location of housing, shopping destination, and choice of travel routes in the journey to work and journey to shop are determined simultaneously by means of stochastic utility maximization. Firms' choices of building type and location and landowners' choices of land-use type and density are determined by means of stochastic profit maximization. Travel occurs on a congestible link—node network. The model determines the wage rate for each employment type in each zone, the price of floor space for each building type in each zone, the price of land in each zone, the price of the locally traded composite commodity in each zone, and the peak and off-peak congested travel-cost and travel-time for each link of the network. The quantity of land which remains undeveloped is also determined. I formulate a nonlinear mathematical programming problem which is equivalent to the general equilibrium problem. Using this formulation, I prove the existence and uniqueness of the general equilibrium in all the prices and physical allocations.

Suggested Citation

  • A Anas, 1984. "Discrete Choice Theory and the General Equilibrium of Employment, Housing, and Travel Networks in a Lowry-Type Model of the Urban Economy," Environment and Planning A, , vol. 16(11), pages 1489-1502, November.
    • Handle: RePEc:sae:envira:v:16:y:1984:i:11:p:1489-1502
    DOI: 10.1068/a161489
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    References listed on IDEAS

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    2. Wang, Guangmin & Kockelman, Kara M., 2016. "Local Sensitivity Analysis of Forecast Uncertainty in a Random-Utility-Based Multiregional Input-Output Model," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 55(2), August.
    3. Huai, Yue & Lo, Hong K. & Ng, Ka Fai, 2021. "Monocentric versus polycentric urban structure: Case study in Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 99-118.
    4. W A V Clark, 1993. "Applying our Understanding: Social Science in Government and the Marketplace," Environment and Planning A, , vol. 25(1_suppl), pages 38-47, January.
    5. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    6. Mahyar Amirgholy & Hojjat Rezaeestakhruie & Hossain Poorzahedy, 2015. "Multi-objective cordon price design to control long run adverse traffic effects in large urban areas," Netnomics, Springer, vol. 16(1), pages 1-52, August.
    7. Zhao, Yong & Kockelman, Kara M., 2004. "The random-utility-based multiregional input-output model: solution existence and uniqueness," Transportation Research Part B: Methodological, Elsevier, vol. 38(9), pages 789-807, November.
    8. Yamagata, Yoshiki & Seya, Hajime, 2013. "Simulating a future smart city: An integrated land use-energy model," Applied Energy, Elsevier, vol. 112(C), pages 1466-1474.
    9. Moshe Ben-Akiva & John L. Bowman, 1998. "Integration of an Activity-based Model System and a Residential Location Model," Urban Studies, Urban Studies Journal Limited, vol. 35(7), pages 1131-1153, June.
    10. W D Macmillan, 1993. "Urban and Regional Modelling: Getting it Done and Doing it Right," Environment and Planning A, , vol. 25(1_suppl), pages 56-68, January.
    11. Eran Ben-Elia & Daniel Shefer & Yoram Shiftan, 2003. "Transportation Impact Statement (TIS)—A New Tool for Transportation and Land-Use Planning," Environment and Planning A, , vol. 35(12), pages 2177-2190, December.
    12. Masanobu Kii & Kenji Doi, 2005. "Multiagent Land-Use and Transport Model for the Policy Evaluation of a Compact City," Environment and Planning B, , vol. 32(4), pages 485-504, August.
    13. J Berechman & K A Small, 1988. "Research Policy and Review 25. Modeling Land Use and Transportation: An Interpretive Review for Growth Areas," Environment and Planning A, , vol. 20(10), pages 1285-1309, October.
    14. Azam Azad Gholami & Inge Thorsen & Jan Ubøe, 2024. "An Agent-based Approach to Study Spatial Structure Effects on Estimated Distance Deterrence in Commuting," Networks and Spatial Economics, Springer, vol. 24(3), pages 621-653, September.

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