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ECON280DLecture 6:Internal Structure of Cities –CommutingCecile GaubertU.C. BerkeleyECON280D. Spring 2019. C. GaubertLecture 6Commuting1 / 45
Within-city structureIMonocentric city model traditionaly used to analyze how agglomeration anddispersion forces shape the within-city distribution of population.Iall employment in CBD (by assumption)Idispersion of residential location due to combination of land scarcity andcommuting costsIpredicts land rent gradient away from the CBD, that exactly offsetscommuting costs (spatial equilibrium)IBut: monocentric model is often at odds with data at the micro level.Igradients of population, income, rents etc. are often not monotonicIrise ofpolycentriccities: not all workplaces in the centerIneed more heterogeneity – quantitative models of within-city geographyECON280D. Spring 2019. C. GaubertLecture 6Commuting2 / 45
Some research questionsIUnderstand agglomeration at the microspatial level.Ia potentially important determinant of productivityIMeasure the effect of local shocks and policies, such asItransport infrastructure improvementsIland-use regulationIplant openingsIStudy urban topicsIresidential segregationIgentrificationINew elements in the analysis:IcommutingIland useECON280D. Spring 2019. C. GaubertLecture 6Commuting3 / 45
TodayIMeasure agglomeration and dispersion forces within cities: Ahlfeldt,Redding, Sturm and Wolf (ECA 2015).IIntegrate cross-city and within-city (commuting) quantitative analysis:Monte, Redding and Rossi-Hansberg (AER 2018).ECON280D. Spring 2019. C. GaubertLecture 6Commuting4 / 45
Ahlfeldt, Redding, Sturm and Wolf (2015)ILittle empirical evidence on the spatial scale of agglomeration.Ivast majority of estimates are across cities. Abstracts from within-cityvariationIdifficult to find exogenous variation in density within the cityIDevelop a quantitative model of city structure to measure agglomeration anddispersion forces, allowing variation inIproduction locational fundamentalsIresidential locational fundamentalsItransport infrastructureIworkers who live and work in different parts of the cityICombine the model with data on Berlin in 1936, 1986 and 2006.Iuse division of Berlin between WWII and 1989 as a source of exogenousvariation in surrounding concentrationECON280D. Spring 2019. C. GaubertLecture 6Commuting5 / 45
Model setupIBuilds on symmetric city model by Lucas and Rossi-Hansberg (2002).IExtends to rich heterogeneity of neighborhoods within citiesICity embedded in a larger economy.Ioutside world provides utility¯U– endogenous mass of workersHIdiscrete set of blocksi, with exogenous land endowmentKiIFreely tradable final good, perfect competition (numeraire)ECON280D. Spring 2019. C. GaubertLecture 6Commuting6 / 45
Model setupIWorkers chooseblock of residenceandblock of employmentto maximizeutility.