Urban Economy - SpeedyLook encyclopedia

The urban economy is a branch of the space economy which specialized little by little with the favor of its object of study (the Ville) and of the models used.

The economic role of the cities

Ground rent and structure of the cities

Following work of Von Thünen (1827), the bond between productivity of a ground and price/revenue of this one doubled of a reflection on the occupation of the ground: that it is of distance to a center (of consumption or rebooking) or about quality of the ground, the level of Rente varies according to the price of the production and the profit which it makes it possible to release. That induces a specialization of the territories mechanically because an activity with poor yield will not be able to pay high revenues and will be immediately évincée of a piece that the quality of the localization or ground promises with “profitable” uses more.

This reasoning leads von Thünen thus (focused on the cost of routing more than on quality of the ground which it supposes homogeneous) to build a radio-concentric model of occupation of the ground, the agricultural produce most profitable (truck farming) being close to the city, most extensive occupying of the pieces located more and more far from the center.

Applied to the growth of the cities, this model allows same manner of including/understanding how the ground to be built (expensive) gradually replaces the agricultural ground in border of the cities as the urban population grows. A whole side of the urban and rural economy contemporary analysis besides conditions of this transition and elements being able to explain that certain pieces are urbanized earlier than others, thus leading to a mitage of urban space.

Traditional mechanisms

Inside the cities, similar mechanisms apply, though more complexes. The ground rent is in the middle of the contemporary urban economy, but its determinants are varied than the only distance to the center or the productivity of the ground. Work of Alonso (1964), Millets (1967) and Muth (1969) made it possible to constitute the base of a theoretical unit on which a vast whole of work developed. In urban environment, the ground rent is given in an indirect way, as a provision to be paid making it possible to balance the utility which a consumer withdraws from a surface at a certain distance from the center and the cost of displacements until his work places, consumption and leisure. When all these places are localized in the center, the ground rent takes a traditional, radio-concentric form: According to whether the “rich person” develop relatively more the size or the accessibility which the “poor”, they will be respectively in periphery or in the center of the cities (model of cities respectively American or European).

Economic analysis of urban looseness: Polycentrisme and Périurbanisation

Looseness in periphery of the places of employment, the shopping malls and spaces of leisure complicates much the determination of the ground rents: whereas those are traditionally decreasing since the center towards the periphery (as the prices testify some to the real estate in the majority of the cities), they can from now on grow locally in periphery around a secondary pole.

Used as element of comprehension and modeling of the cities, the ground rent finds in the middle them economic models making it possible to analyze the consequences of particular investments or tariffings of transport on the shape of the cities.