Economics 157-10 CRN 82603 ; Summer 2022 Urban & Regional Economics
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Economics 157-10
CRN 82603 ; Summer 2022
Urban & Regional Economics
Syllabus
Course Overview:
Urban economics studies the location choices of households and firms which determine the formation of cities of different size and shape. In this course, we will use basic microeconomic concepts to understand how the location decisions of rational (utility- maximizing) households and (profit-maximizing) firms are made. Using this framework, we will explain a) the existence, location, growth, and internal structure of cities, b) housing markets, and c) many problems found in U.S. cities (such as crime and pollution) and will consider various public policies for mitigating these problems.
Hybrid Course:
This is a hybrid course. I have posted on Blackboard instructional material that include video lecture notes as well as a detailed reading and assignment schedule. This material should allow you to study and to complete your HW (asynchronous online lectures). We will also meet once a week in-person on Wednesdays during regular class time. This time will be devoted to class instruction, testing and review of HW questions.
Required Textbook: Arthur M. O'Sullivan, Urban Economics, 8th Edition (McGraw- Hill/Irwin) 2008.
Recommended Textbook: Richard Green and Stephen Malpezzi, A Primer on U.S. Housing Markets and Housing Policy, (Urban Institute Press) 2003.
Grades:
HW: 10%
Empirical Projects: 25%
Class participation: 5%
Quizzes: 10%
Midterm: 25%
Final: 25%
Homework:
You will be assigned homework sets during the course. Working problems and exercises is essential and the assigned homework problems are the minimum work you should do. You should work out the problems at the end of chapters in O'Sullivan. You may work in groups consisting of no more than 4 students; however, you need to write and submit your own individual solutions. Homework will help you prepare for the quiz, and midterm and final exams.
Exams
During your exams (midterm and final), you will be allowed to use your class notes. There will be no make-up exams. If you miss an exam your final will be re-weighted only if you provide me in writing with an acceptable excuse. Acceptable excuses are rare, for example a family death, serious sickness, or participation in University sponsored athletic activities (in this case I should be informed before the exam). Please, note that all exams and quizzes are cumulative.
Empirical Projects
I will assign two empirical projects where you will collect data and estimate racial dissimilarity indices and a home price index. More details will be provided later.
Attendance
You are required to attend my synchronous lectures on Wednesday. Your questions and comments during lectures constitute an important part of the learning process and are strongly encouraged. Besides, your overall attendance rate will guide me to evaluate your class participation grade. If you decide to attend I request that you are on time and stay for the entire class period. If you cannot attend a class (or you choose not to), it is your responsibility to talk with your class mates and make sure you know the topics I covered in class or any announcement I made.
The Academic Integrity Code
I will assume that students are familiar and will follow the University’s Academic Integrity Code.
Learning objectives
At the end of the course, among other things, students will be able to: explain why urban areas are formed; describe why urban areas grow at different rates; calculate regional multiplier effects using the input-output model; apply results from hedonic models to compute regional housing price indices, and; apply the land use model to answer land use policy questions.
TENTATIVE course outline
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I. INTRODUCTION |
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1 |
Introduction. Introduction to the subject, descriptive statistics, & axioms of urban economics II. THE MARKET AND THE DEVELOPMENT OF CITIES |
O’Sullivan Chapter 1 |
1 |
Axioms of urban economics. Why cities do exist? Comparative advantages and trading cities. |
O’Sullivan Chapter 1, Chapter 2 |
1 |
Why cities do exist? Factory cities. Basic location theory for a firm. |
O’Sullivan Chapter 2. Class notes |
1 |
Basic location theory for a firm. Firms clustering. Agglomeration economies |
O’Sullivan Chapter 3 |
1 |
Agglomeration economies |
O’Sullivan Chapter 3 |
2 |
The size of a city. The rank-size rule. Supply and demand models of regional development. |
O’Sullivan Chapter 4 |
2 |
Explaining urban growth. Labor demand, labor supply, and equilibrium. Neoclassical model of urban growth |
O’Sullivan Chapter 5 |
2 |
Input-Output models: assumptions, uses & limits
III. THE ECONOMICS OF LAND AND LAND POLICY |
Lecture notes |
3 |
How much does land cost? Market models of land rent |
O’Sullivan Chapter 6 |
3 |
Land use patterns. Theory and evidence. Use of computer models to simulate the structure and of the city |
O’Sullivan Chapter 6 & 7 |
3 |
MIDTERM |
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4 |
Neighborhood choice and segregation. Public goods and externalities |
O’Sullivan Chapter 8 |
4 |
Applying the land use model to land-use policy & zoning
IV. HOUSING |
O’Sullivan Chapter 9 |
4-5 |
Overview of the US and local housing market Measuring quantity & price of housing services. How much does land cost? Evidence of geographical housing rent differences in the US. Cost of housing & personal income taxes |
O’Sullivan Chapter 13 / Green & Malpezzi Chapters 1 & 2 O’Sullivan Chapter 6 and lecture notes |
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Search costs in the housing market. The role of the internet Questions and answers on housing policy |
Lecture notes O’Sullivan Chapter 14 / Green & |
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Malpezzi Chapters 3 & 4 |
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VI. URBAN TRANSPORTATION PROBLEMS AND POLICIES |
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6 |
Externalities from autos: highway congestion and air pollution. Use of tax / subsidies Mass transportation |
O’Sullivan Chapter 10 O’Sullivan Chapter 11 |
2022-06-21