Regional and Urban Economics and Economic Development : Theory and Methods

788 Pages·2007·8.09 MB·English

by  Edwards, Mary E

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Dedication
To my husband,
Chester
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Foreword
Abasic principle amonggeographers is that everythingis somewhere,and
where it is matters. Far from being random, the spatial distribution of
phenomena over the earth’s surface has causes, and it also has effects. An
important part of both causes and effects relates to cost, or in other words,
economicfactors.Regionalandurbaneconomicsexplorethesecost-related
causes and effects of the location of many kinds of phenomena.
Understandingtheseeconomicfactorshasimportantpracticaluses,both
in personal lives and in the establishment of public policy. Regional and
Urban Economics: Theory and Methods addresses these topics from both
points of view. People make many decisions in their lives, even uncon-
sciously,onthebasisofrelativecosts.Particularlyinthesedaysofhighand
risingfuelprices,howfarawayapotentialdestinationiscangreatlyimpact
its attractiveness. Similarly, business firms must locate their facilities some-
where.Theinputsneededandthemarketarealsolocatedsomewhere,and
firms must somehow bring those factors together or bridge the gaps
betweenthem.Thus,theyfacetransportationexpenses—thecostofrelative
locations—andfactortheseexpensesintolocationdecisions.Theirchoices
will, in turn, influence other locational decisions.
Publicpolicydecisionsareamajorfactorinlocationaldecision-making.
They involve the siting of public facilities, which in turn may make a
particular location more or less attractive to enterprises. Firms bring jobs
andpurchasegoodsandserviceslocally,therebyinfluencinghowattractive
theregionistopeople.Inotherwords,attractingfirmstoaregionisakeyto
its economic development, raising the standard of living for residents.
These principles also apply to urban areas, where the vast majority of
North Americans live. Periurban zones, those rural areas that border cities,
have been especially attractive to Americans, leading to greater wealth but
alsotothespreadofurbanfeaturesthathavebeendubbed“sprawl.”Issues
ofhousingaffordability,lossofgreenspace,andincreasedtrafficcongestion
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viii &
havebeen particularlycontroversial,leading tovariousproposals andcalls
for“sustainable”or“smart”growthofcities.Economicsfacestheemotional
component of these issues with hard analysis, which brings new perspec-
tives even though it may not have final answers. The issue becomes
political, and in such policy disputes, economics offers a less emotional
perspective. It also introduces the spatial perspective of impacts on
neighboringplaces,asonejurisdictionconsidersaparticularpolicyalterna-
tivethatmayseemespeciallyattractiveforitsresidentsbutmayexacerbate
problems elsewhere in the wider region.
Urbaneconomicsalsoaddresseslocationalquestionsofpublicfacilities,
especially as cities attempt to deal with problems that concentrated there,
such as poverty and crime. Cities contain diverse populations that contend
forresources,andmunicipalgovernmentsfacethechallengeofanequitable
distribution of costs and benefits.
Regional and Urban Economics: Theory and Methods introduces
students to these principles that will impact their lives. They make daily
decisions as consumers and as residents, and the book regularly invites
them to consider these questions. Furthermore, if only as voters, they
participate in collective decisions on various questions of public policy,
including the all-important issue of where. Where it is matters in terms of
economic causes and effects.
Elizabeth J. Leppman
Lexington, Kentucky
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Preface
Thisbookprovidesasolidapproachtoanalyzingtheeconomyofaregion
or urban area. The aim is to first study firm location analysis and then to
investigate why regions grow. Once regional growth is understood, it is
possible to envision how growth affects the various-sized cities within an
area and the use of land in and around its cities. After determining where
households will locate, it is then possible to analyze the effectiveness of
local governments in solving problems endemic to an urban area.
It is important for students to have hands-on experience in evaluating
regionaldata.Providedarestraightforwarddirectionsfordelineatingmarket
areas, for identifying the economic base of a region, and for decomposing
regionalemploymentdatatodeterminewhyitisexpandingorcontracting.
This text also describes methods for calculating and interpreting various
indicatorsofsocialwelfare,suchasstandard-of-livingindices,dependency
ratios, employment and unemployment indicators, inequality indices, and
migration rates.
Finally, herein lies a framework for evaluating public policy based on
efficiency and equity concerns. This framework uses analyses based on
traditional public finance models as well as on public choice models.
Several definitions of “equity” are investigated, and these definitions are
incorporated throughout the text in the policy analyses.
Intended Audience
The audience of this textbook includes students of economics, real estate,
public administration, and economic development. It is assumed that
students have studied principles of macroeconomics and microeconomics.
The book is accessible to students whose understanding of economics is
limited; however, techniques unique to regional analysis will also interest
advanced undergraduate students and master’s degree students of
economics.
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