A Computable General Equilibrium Model of the City: Impacts of Technology, Zoning, and Trade

Craig Olwert and Jean-Michel Guldmann
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Craig Olwert: Department of Urban Studies and Planning, California State University, Northridge, CA 91330, USA
Jean-Michel Guldmann: Department of City and Regional Planning, The Ohio State University, Columbus, OH 43210, USA

Environment and Planning A, 2012, vol. 44, issue 1, 237-253

Abstract: This paper presents a computable general equilibrium model of a stylized linear city that simultaneously minimizes transportation costs while satisfying labor, and, and goods equilibrium conditions, in the tradition of Anas and Kim, while introducing a monetary balance. This model has structural similarity with Davis's design of an optimal transportation system under user equilibrium conditions. The model includes three industries: manufacturing, retail, and services. Their economic transactions are empirically modeled using national input–output data, which allows for the endogenous determination of import and export pricing and flows. Numerical applications show that more efficient transportation increases utility and leads to a centralization of the population, and that zoning, under various restriction scenarios, decreases utility, with the most detrimental effects on residents in unrestricted zones. Finally, a zero trade deficit scenario results in lower utility, a larger transportation system, and smaller residential lots, with higher CBD population density.

Keywords: computable general equilibrium; land use and transportation; regional planning; trade; zoning; input–output data (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:44:y:2012:i:1:p:237-253

DOI: 10.1068/a43606

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