Dresden discussion paper series in economics 06/09
Households in real cities are heterogeneous regarding their size and composition. An aspect usually neglected in urban models used to study economic and policy issues that arise in today's cities. We develop an urban general equilibrium model that takes a more complex household structure explicitly into account. The model is based on the single consumer type model of Anas and Xu (1999) or Anas and Rhee (2006) and treats the interactions of urban product, labor and land markets as well as linkages between city firms and different consumer types living in different household structures. Households differ not only in endowments, preferences and their valuation in regard to different travel modes, but also in size and the composition regarding their members. The implementation of a more complex household structure then allows studying a broad range of further urban economic issues, which treat different household structures differently.
Urban Economics General Equilibrium Household structure Location choice