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Land development, search frictions and city structure

Yasuhiro Sato and Wei Xiao

Regional Science and Urban Economics, 2015, vol. 50, issue C, 63-76

Abstract: This paper analyzes the interactions between labor and housing (and land) markets in a city. We develop a monocentric city model involving land development and frictional unemployment and characterize the city's spatial configurations in equilibrium. To better understand the properties of equilibria, we implement a comparative steady state analysis. Further, we explore the effects of policies such as (a) a tax on land development to subsidize residents' consumption, (b) a subsidy to improve the transportation infrastructure financed by a lump-sum tax, and (c) income transfers from employed to unemployed workers. Finally, we provide an extension wherein the job arrival rate is endogenous and depends on distance to jobs.

Keywords: Land development; City structure; Search frictions; Spatial mismatch (search for similar items in EconPapers)
JEL-codes: R14 R21 R28 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:50:y:2015:i:c:p:63-76

DOI: 10.1016/j.regsciurbeco.2014.10.005

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