Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87357
Authors: 
Kantor, Yuval
Rietveld, Piet
van Ommeren, Jos
Year of Publication: 
2013
Series/Report no.: 
Tinbergen Institute Discussion Paper 13-084/VIII
Abstract: 
Mixed commercial and residential land use is observed in most cities around the world. This is in contrast to a myriad of bid rent models, which predict that mixed land use does not occur. The main exception are the models by Fujita and Ogawa (1982) and Lucas and Rossi-Hansberg (2002) that predict the presence of a very restrictive type of mixed land use. The latter study derives the equilibrium distribution of residential and commercial land uses while allowing for endogenous agglomeration externalities. We extend this model by introducing a traffic congestion externality. We show that congestion induces a general type of mixed land use zone, which is comparable to the type of zone assumed in the model of Wheaton (2004). The interplay between these externalities is then demonstrated, as reduced congestion leads to commercial concentration and agglomeration gains.
Subjects: 
land use
congestion
agglomeration
externalities
JEL: 
R13
Document Type: 
Working Paper

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