EconPapers    
Economics at your fingertips  
 

Optimal size of a residential area within a municipality

Juan Bárcena-Ruiz () and F. Casado-Izaga

Journal of Economics, 2018, vol. 124, issue 1, 75-92

Abstract: Abstract The purpose of this paper is to analyze the optimal size of a residential area within a municipality under different market structures. We find that under a private duopoly the optimal size of the residential area depends on the ratio between transportation costs and a negative externality due to congestion. The optimal size is the whole municipality when the ratio is low enough and a small area of the municipality when the ratio is high enough. The transition from a flat residential area to a more compact one is not continuous, so some large-enough residential areas are never optimal. Under a mixed duopoly the transition from a flat residential area to a more compact one is continuous as the ratio increases. By comparing the two cases we find that for intermediate values of this ratio a flat city is optimal for a private duopoly while compact cities emerge under a mixed duopoly.

Keywords: Spatial competition; Location choice; Residential area; Congestion (search for similar items in EconPapers)
JEL-codes: D43 L13 R14 R52 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00712-017-0561-5 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:124:y:2018:i:1:d:10.1007_s00712-017-0561-5

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-04-16
Handle: RePEc:kap:jeczfn:v:124:y:2018:i:1:d:10.1007_s00712-017-0561-5