Agglomeration, commuting costs, and the internal structure of cities

Hans Koster and Jan Rouwendal

Regional Science and Urban Economics, 2013, vol. 43, issue 2, 352-366

Abstract: Urban areas are characterized by dispersed employment patterns and mixed land use. Lucas and Rossi‐Hansberg (LRH) [Econometrica 70 (2002), 1445–1476] develop a model where the urban spatial structure is determined by the external benefits of agglomeration and the commuting costs for workers. This paper reviews and tests implications of the LRH-model for residential rents using semiparametric regression techniques. We show that in mixed urban areas, agglomeration is an important determinant of the rent, while in predominantly residential areas proximity to a business area significantly impacts rents, as is suggested by the theory.

Keywords: Agglomeration; Commuting; Rents; Mixed land use; Urban spatial structure; Semiparametric estimation (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:43:y:2013:i:2:p:352-366

DOI: 10.1016/j.regsciurbeco.2012.09.001

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