Linearized, Optimally Configured Urban System Models: A Profit-Maximizing Formulation

J E Moore and L L Wiggins
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J E Moore: Department of Civil Engineering, Northwestern University, Evanston, IL 60201, USA
L L Wiggins: Department of Civil Engineering, Stanford University, Stanford, CA 94305, USA

Environment and Planning A, 1988, vol. 20, issue 3, 369-390

Abstract: A general equilibrium, linear programming land-use model formulated in the heritage of Edwin Mills is extended to include a profit-maximizing objective function. This analog of the existing, cost-minimizing formulations in the literature is driven by exogenous export prices rather than by minimum-export requirements. It is demonstrated that the absence of minimum-export constraints results in an optimum corresponding to the exclusive export of the most profitable good. In addition, the outputs of the model are shown to be arbitrarily dependent on assumptions about zone geometry if export prices are high. A static, spatially disaggregate version of the model is specified by means of hexagonal land-use zones. Perfect market conditions are assumed and spatial markets identified. Production technologies are of the fixed-coefficient type with constant returns to scale. Import flows are treated explicitly for the first time in a model of this class, and their inclusion is shown to have a significant impact on optimal land-use configurations.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:20:y:1988:i:3:p:369-390

DOI: 10.1068/a200369

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