Prefaceix
1 Why Cities Exist 1
1.1 Introduction 1
1.2 Scale Economies 2
1.3 Agglomeration Economies 5
1.4 Transport Costs and Firm Location10
1.5 The Interaction of Scale Economies and Transportation Costs in the
Formation of Cities16
1.6 Retail Agglomeration and the Economics of Shopping Centers18
1.7 Summary20
2 Analyzing Urban Spatial Structure 23
2.1 Introduction23
2.2 Basic Assumptions25
2.3 Commuting Cost26
2.4 Consumer Analysis27
2.5 Analysis of Housing Production33
2.6 Population Density39
2.7 Intercity Predictions42
2.8 Summary50
3 Modifi cations of the Urban Model 51
3.1 Introduction51
3.2 A City with Two Income Groups51
3.3 Commuting by Freeway56
3.4 Adding Employment Outside the CBD57
3.5 Durable Housing Capital61
3.6 Cities in Developing Countries65
3.7 Summary68
4 Urban Sprawl and Land-Use Controls 69
4.1 Introduction69
4.2 Empirical Evidence on the Spatial Sizes of Cities70
4.3 Market Failures and Urban Sprawl73
4.4 Behavioral Impacts of Urban Sprawl80
4.5 Using Land-Use Controls to Attack Urban Sprawl80
4.6 Other Types of Land-Use Controls84
4.7 Summary89
5 Freeway Congestion 91
5.1 Introduction91
5.2 Congestion Costs92
5.3 The Demand for Freeway Use95
5.4 Traffi c Allocations: Equilibrium and Social Optimum99
5.5 Congestion Tolls104
5.6 Choice of Freeway Capacity110
5.7 Application to Airport Congestion112
5.8 Summary114
6 Housing Demand and Tenure Choice 115
6.1 Introduction115
6.2 Housing Demand: The Traditional and Hedonic Approaches116
6.3 The User Costs of Housing119
6.4 Tenure Choice124
6.5 Down-Payment Requirements, Tenure Choice, and
Mortgage Default130
6.6 Property Abuse and Tenure Choice133
6.7 Summary136
7 Housing Policies 137
7.1 Introduction137
7.2 Rent Control137
7.3 Housing-Subsidy Programs145
7.4 Homelessness and Policies to Correct It153
7.5 Summary 157
8 Local Public Goods and Services 159
8.1 Introduction 159
8.2 The Socially Optimal Level of a Public Good 161
8.3 Majority Voting and Voting with One ’ s Feet 163
8.4 Public-Good Congestion and Jurisdiction Sizes174
8.5 Capitalization and Property-Value Maximization179
8.6 Tax and Welfare Competition183
8.7 Summary185
9 Pollution 187
9.1 Introduction187
9.2 Pollution from a Single Factory and Governmental Remedies188
9.3 Bargaining as a Path to the Social Optimum: The Coase Theorem196
9.4 Cap-and-Trade Systems200
9.5 Evidence on Air Pollution and Property Values204
9.6 Summary205
10 Crime 207
10.1 Introduction207
10.2 The Economic Theory of Crime208
10.3 Additional Aspects of the Theory215
10.4 How to Divide a Police Force Between Rich and Poor
Neighborhoods221
10.5 Summary 229
11 Urban Quality-of-Life Measurement 231
11.1 Introduction231
11.2 Theory: The Roback Model233
11.3 Measuring Urban Quality of Life241
11.4 Additional Issues244
11.5 Summary245
Exercises247
References273
Index281

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