Edwin S. Mills

Uncertainty and Price Theory

I. Introduction, 116. — II. Cost and uncertain demand, 117. — III. Alternative specifications, 118. — IV. Single period horizon: equilibrium conditions, 119. — V. The fundamental theorem, 122. — VI. Example: constant marginal cost, linear riskless demand, and rectangular distribution, 124. — VII. Rising marginal cost, 126. — VIII. Falling marginal cost, 127. — IX. Multi-period horizon, 128.— X. Conclusion, 129.

Metropolitan suburbanization and central city problems

Abstract This paper is an empirical study of effects of central city problems on population and employment suburbanization. It is widely believed that high crime, high taxes, and large minority groups in central cities are important causes of rapid suburbanization of U.S. metropolitan areas. A large set of density functions is estimated for population and employment in U.S. metropolitan areas in 1960 and 1970. Thus, relative central city and suburban measures of crime, taxes, etc., are used in an interactive model to explain population and employment suburbanization. It is found that only racial minorities have an effect on suburbanization.

A Comparison of Urban Population Density Functions in Developed and Developing Countries

The authors attempt to summarize what can be learned from the efforts that have been made to estimate urban population density functions. In particular they attempt to ascertain whether there are regularities pertaining to density functions either through time or in comparing developing and developed countries at a given time (ANNOTATION)

A Model of Market Areas with Free Entry

E purpose of this paper is to analyze a model of location within , a single industry under the special assumption that space is uniform and undifferentiated in several important ways. The definitive work on this problem is that of Ldsch,2 who claimed that free entry must result in space-filling, hexagon-shaped market areas. We will show that this claim is incorrect and that a wider variety of results is consistent with Lbschs assumptions. Ldschs mistake (repeated by Valavanis3 and by Kuenne4) is to assume that a necessary condition for industry equilibrium with profit maximization and free entry is that market areas be space-filling. This ought instead to be presented as a theorem and, as such, it turns out to be false. We have chosen to analyze a special case, involving assumptions of linearity at several important steps. Our model is simple enough to permit a fairly exhaustive analysis, yet general enough to display a wide range of possible results. In addition to a detailed analysis of the

Office Rent Determinants in the Chicago Area

This paper analyzes 1990 office asking rents in the Chicago metropolitan area. It carefully specifies a measure of the present value of a lease, taking account of important properties of rent offers. This present value is the dependent variable in the statistical analysis. The sample data analyzed pertain to 543 offices that contain about 80% of the office space in the metropolitan area. The present value of asking rents is related to many building characteristics and to each buildings location. The analysis demonstrates that asking rents depend on about fifteen characteristics of the building and on a careful specification of its location. Copyright American Real Estate and Urban Economics Association.

Land Use Controls and Housing Prices in Korea

This paper analyses the effects of government controls over land supply on housing in the rapidly growing cities of Korea. Whilst Koreas urban population more than doubled in the period 1973-88, urban land for residential use grew by only 65 per cent. The result has been extremely rapid rises in city residential land values, although the more dense use of residential land has offset some of this rise on house prices. A substantial part of the rise in house prices has resulted from the governments tendency to underallocate land to urban residential use, although part of the governments surplus is used to subsidise low-income housing within the same projects.

MARKETS AND EFFICIENT RESOURCE ALLOCATION IN URBAN AREAS

Summary The purpose of the paper is to put forward a model in which it is possible to analyze the efficiency of market resource allocation in urban areas. The model is a linear programming formulation in which the various activities by which goods can be produced are interpreted to represent production with different land intensities, or buildings of different heights. The urban area produces predetermined amounts of a finite number of goods to be exported from the urban area, and housing for the urban areas workers. The model determines the optimum location of production of each unit of each export good and of housing in the urban area. It also determines the optimum amounts of resources to be devoted to the urban areas transportation system and the optimum amount of congestion. The paper concludes by a demonstration that correct pricing of the transportation system is the key to efficient resource allocation by markets and it provides a measure of the loss of welfare from improper pricing of transportation facilities.

Notes on the New Urban Economics

Since about 1970, ten or twenty papers have been written making use of control theory or programming to analyze optimum or market equilibrium urban land use. The purpose of these notes is to survey and evaluate this new approach to urban economics. Most contributions to the new urban economics assume that employment is concentrated at the urban center, but that housing production functions permit the amount of housing per unit of land to vary with economic conditions. An optimum or equilibrium pattern of housing density is deduced as a function of distance from the center. All contributions include assumptions about the urban transportation system, and some have congestions built into the model. The last part of the paper is a discussion of discrete and continuous representation of urban space. The two possibilities lead to different mathematical representations, and we suggest that discrete representations may be more useful for many purposes.

Has the United States Overinvested in Housing

Several economists have concluded that housing investment has been excessive relative to industrial investment in the U.S. Most blame provisions of the federal income tax that favor owner-occupied housing.This paper poses the question within a two-sector neoclassical growth model which permits the social return to housing to differ from that to non-housing. The model is estimated using national income accounts and capital stock data from 1929 to 1983. The conclusion is that the return to housing capital is about half that to non-housing capital and that the housing stock should be about 75% of its 1983 volume. Copyright American Real Estate and Urban Economics Association.

A Thematic History of Urban Economic Analysis

What is urban economics?1 I will refrain from torturing myself with this issue. Any definition will be too wide for some and too narrow for others. My definition will be simple, but appropriate for my interests and background: urban economics is scholarly writing that has specifically urban content and contains specifically economic analysis. Everyone will notice that my definition leaves room for judgment, which I will exercise freely. My concern, as the title indicates, is with themes and only incidentally with authors. I propose to ask: What subjects has urban economics been concerned with, and how have they changed through time? What has been the division of labor between theoretical and applied research? And most important, with what subjects has progress been made, and what significant problems are still outstanding? Where does one look for urban economics publications? One journal, the Journal of Urban Economics, whose twenty-fifth birthday 1999 was, has exactly that title. Two or three other journals have those or similar words in their titles. Several scholarly journals are devoted each to housing, transportation, and analysis of local government, and each such subject has a continuum of journals and magazines that blend into trade publications. Per-