On the sustainability of a monocentric city: lower transport costs from new transport facilities

Gokan Toshitaka

No 548, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper proposes a general equilibrium model of a monocentric city based on Fujita and Krugman (1995). Two rates of transport costs per distance and for the same good are introduced. The model assumes that lower transport costs are available at a few points on a line. These lower costs represent new transport facilities, such as high-speed motorways and railways. Findings is that new transport facilities connecting the city and hinterlands strengthen the lock-in effects, which describes whether a city remains where it is forever after being created. Furthermore, the effect intensifies with better agricultural technologies and a larger population in the economy. The relationship between indirect utility and population size has an inverted U-shape, even if new transport facilities are used. However, the population size that maximizes indirect utility is smaller than that found in Fujita and Krugman (1995).

Keywords: Econometric model; Transportation; Urban societies; Urban system; Monopolistic competition; Transport facilities (search for similar items in EconPapers)
JEL-codes: F12 O14 R12 (search for similar items in EconPapers)
Date: 2016-01-01
New Economics Papers: this item is included in nep-geo, nep-tre, nep-upt and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 548. 2016-01-01

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