Equilibrium land use with collective housing developments: voting with feet and entrepreneurship

Hideo Konishi ()
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Hideo Konishi: Boston College

The Japanese Economic Review, 2025, vol. 76, issue 4, No 2, 717-739

Abstract: Abstract In urban economics, the monocentric city model has been widely used to analyze equilibrium land use in a city. However, these models often treat housing and land interchangeably and do not explicitly consider collective housing developments. This paper revisits a closed-city monocentric model and presents a framework for analyzing equilibrium land use, allowing for multiple types of housing developments, various consumer types, and arbitrary local government regulations on development. Our equilibrium concept, free-entry equilibrium, is a feasible allocation in which it is not possible to find a profitable housing development with an amenity/pricing policy that can attract tenant residents. To establish a foundation for the analysis, we prove the existence and (constrained) efficiency of the free-entry equilibrium in this model, incorporating local externalities and joint production of housing within each housing development, under minimal assumptions—continuity of utility and cost functions, and compact feasible sets.

Keywords: Bid rent curves; Mixed developments; Voting with feet; Existence of equilibrium; Entrepreneurship; Constrained efficiency; D50; H41; R13; R14 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s42973-025-00213-9

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