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11 (Central Place Theory, Measuring Productivity, Retail gravitation, Bid…
11
Central Place Theory
Assumptions:
- space isotropic 'flat features plane'
- distance only variable
- transportation costs increase proportionate
- all agents homogenous across space
- homogenous preferences
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Market reach - price beyond willing to pay.
where one market end, another starts
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Excess profits beyond threshold induce others to enter market - range gets smaller until range and threshold converge
High order goods:
consumed infrequently, large threshold and range
Low order - everyday items, small threshold and range
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Measuring Productivity
doubling city size, how does productivity change?
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Firm selection?
Combes (2012)
in France, productivity advantages explained by externalities not firm selection
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Bid rent - Alonso
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Offices
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Build tall?
China subsidised Skyscraper development but lack of spillovers from poor location choice away from CBD
Residential
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consumer substitution - savings in commuting spent on housing - spend more on housing and amenities in CBD
Agglomeration
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Evidence:
- clustering beyond possible from natural advantage
- spatial pattern in wages
- variations in productivity
Monocentricity
Alonso model 1960s
density, value and price fall from centre
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Globalisation
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Florida, Siglitz - spiky world
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Sarrett's impossibility theorem - if we reduce space to homogenous without increasing returns or indivisibilities, cities would not exist
Place attractiveness
Albouy
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modern view that wage premiums account for city amenity as well as disamenity - urbanisation amenities compensate disamenities
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Limitations:
- across space not time - between not within
- does not consider rural - assumes everyone has same preference for urban amenities and would move
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Second nature geography, artificial, endogenous variables: leisure, services, retail
First nature geography, natural, exogenous variables:
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Segregation
Selling's tipping model
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assumes mobility based on characteristics, not job and housing availability
Ahmed
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statistical discrimination - treating groups differently as observable characteristics may be correlated to unobserved characteristics
Glaeser theories of racism
- Port of entry
- collective action racism
- decentralised racism
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Jargowsky - trends in segregation
- the Great Migration
- suburbanisation
address through:
- development policies for children
- ameliorative policies helping poor cope e.g. food stamps
- improve public goods
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Tiebout sorting model
people vote with feet to areas with preferred public goods, price and taxes
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consequences (Jefferson):
- people do not realise potential
- spatial mismatch
- polarised society - hard to get neighbourhoods to agree - median voter not representative
- spatial poverty traps
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Education
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Education production function:
Achievement = f(H,P,C,E,T)
- home environment, peer group, curriculum, equipment, teacher
parents offer support in home environment - wealthier families have more materials and more favourable learning rules
Peer group: motivation, cooperation and competition
Burke - placing high achiever in middle class increases aggregate performance, but high achiever in low class decreases performance as low achievers see little benefit
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Charter schools e.g. Harlem academy - focused learning environment, extended school day and year, selective teaching, testing
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Troller - poverty and brain development
Children from high income saw increased early years brain development
micrcofoundations of education and skills:
- school
- family
- neighbourhood
Perry experiment:
- early extra schooling program for random group aged 4
- increase in short term IQ
- no sustained IQ increase (started mixing with control groups at school?)
- long term higher achievement and income
- IQ does not determine life outcomes as only measures cognitive skills
Choice of school:
- catchment based system in UK - school determined by location and WTP
- good quality teachers attracted to higher income areas (London)
- wealthier families have more info
neighbourhood effects:
good schools attract well informed and wealthy parents
restricting attendance leads to housing price rise
Bayer - spatial discontinuity study San Fransisco
- house prices and test score higher in good school catchment
- no difference in house type
- higher incomes on good school side
Growth and decline
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D&P - in France only 10% of firms moved.
for those that moved, 70% moved from diverse to specialised
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Spatial equilibrium
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hedonic pricing - how internal and external factors influence price
micro level analysis of how lots in an area differ
assumes rational location choice - we know for Costa's colocation paper that people make coplrimises due to personal situations
Crime
Neighbourhood effect?
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communities with cohesion and social capital have lower crime - Akcomak, Samson
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Why is there more crime in cities?
- lower social accountability
- increased resentment from ineuqalities
- agglomeration effect of organised crime
- lower probability of arrest
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