Essays in Urban Economics, Economic Geography and Water
This study has two primary focuses. The first is on the uneven distribution of high quality land across space. Of particular interest is how the spatial heterogeneity of land affects the location of households across regions, the development of land for urban and agricultural purposes within regions and the spatial structure of urban land use patterns within a given city. A second focus is how interbasin water transfers, which ameliorate the uneven distribution of water across regions, affect inter and intraregional land-use patterns. More specifically, the question this research asks is, what are the consequences of water transfers across regions when the preferences of households and the productivity of agricultural appears to favor the land in arid locations? And when land quality varies spatially, how does that alter the development patterns of cities and regions generally?
This research develops a framework for analyzing the implications of interbasin water transfers on interregional migration and intraregional land use patterns. The model employed in Chapter 2 is a novel synthesis of the two dominant models in the urban economics literature, namely, the two region core-periphery model and the monocetric city model. However the model is modified to account for spatial disparities in the quality of land across regions. In particular, a scenario is explored where one region has a greater degree of natural amenities and thus, ceteris paribus, is preferred by households, as well as a comparative advantage in agricultural production. In addition, there are agglomeration externalities in the urban labor force, which, if sufficiently strong, leads to a concentration of all households in a single region. A second modification is that the more attractive region lacks water resources and, in order to satisfy household and agricultural water demand, must import water from the other region. This setup focuses on the tension between what is termed the amenity premium for households and the productivity premium for the agricultural sector, both of which compete for land in the same region.
Chapter 3 introduces public infrastructure into the previous model. The infrastructure, which is endogenous and defined by the demand for water in each region, is financed through a flat tax. In addition, we consider that there are transport costs in the distribution of agricultural output across regions. This assumption allows for three different trade regimes. Autarky, in which each region produces agriculture solely for the local population. Incomplete specialization, in which the more productive region produces all local supply and any excess is sold to the other region to supplement local output. Complete specialization, where all agricultural production is concentrated in a single region.
Chapter 4 turns to the issue of the heterogeneity in the quality of land within cities. The monocentric city modeling framework has developed a robust specification of urban spatial structure. In particular, it has shown how commuting costs play a crucial role in the spatial variation of housing rents, building heights and household living spaces. However, the model has been less capable in explaining the structure of cities at a more local scale. For instance, in cities with a dominant Central Business District (CBD) there does tend to be a decline in both building heights and housing rents as one moves further from the CBD. However, in a given neighborhood building heights and rents may not decline monotonically. There could be a host of reasons why this would be the case: historical factors, zoning regulations, idiosyncratic development patterns. Chapter 4 proposes that one such explanation is the heterogeneity of developable land over the space of a city.