The Interaction Between Local Government and Urban Residential Location: Reply and Further Analysis

摘要: Elhanan Helpman, David Pines, and Eli Borukhov (H-P-B) provide an interesting generalization of my earlier paper (1974b). Their less specific characterization local public services permits them to consider both completely congestible "club goods,."I which are the types implicitly considered in model,2 "pure" services. H-P-B also draw a useful distinction between goods that act as substitutes for increased land occupancy (complements population density) can be viewed people-enhancing services, those complementary large holdings a-nd property-enhancing services.3 A case made assumptions realistic approximations most urban areas United States, none H-P-B's results contradict conclusions within framework restricted optimality; nevertheless, power what I would call planninganalytic approach4 dealing with very generalized functional relationships is obvious. What equally obvious have not parallel analysis where income levels vary according some known distribution. It may appropriate argue ultimate policy prescriptions should tied about forms, but similarly, incorporate reality tolerated differences (or utility) at least demonstrate their effect on solutions.5 substantially overcome first difficulty, present adopts technique account effects mandated dispersions household utility levels. The show how changes distribution level alter optimal form. begin by establishing importance city's determining its shape. Previously developed spatial equilibrium market solutions used numerically simulate sizable density gradient6 under different' assumed distributions income. Next, forms relaxed planning-analytic approach Ipursued several utility. In particular, sufficient conditions rising gradient city established, possibility ofhaving allocation *Assistant professor economics environmental engineering, Cornell University. wish thank Yoshitsugu Kanemoto his helpful comments. 'See James Buchanan. 2Both John Wile pointed out restrictions inherent previous formulation. 'A Cobb-Douglas or log-linear function such specifies good borderline case, neither substitute nor complement. 4The straightforward solution problem, analyzed H-P-B, versus two-step procedure then social optimum computed based upon this framework. Robert Solow latter procedure, it paper, lead global optimum. One advantage the"planning-analytic" ease externalities identified therefore second best recognized. 5The prior works Martin Beckmann Aldo Montesano pursued problem Riley, Mirrlees, Avinash Dixit explored slightly more limited cases using approach. As an. example allows unequal utilities exist, weighted negative exponential welfare function. Dixit's model assumes production functions., 'The relationship density,and distance from central business district (CBD).