Lect 8 - GEOCITIES.ws
Download
Report
Transcript Lect 8 - GEOCITIES.ws
EM 4103: Urban Planning II
Lecture 8: Employment
Analysis in Planning
EMPLOYMENT FORECASTING
• Much of urban planning activities revolves around
population, employment and housing as these form
the crux of most economic activities in cities.
• Many models have been postulated to explain urban
economic growth.
EMPLOYMENT FORECASTING
continued
• Important ones include demand-based models
which emphasise the importance of the change
in level and pattern of demand for goods and
services produced by the city.
• This is seen as the major cause of changes in
the level of incomes and population.
ECONOMIC BASE THEORY
• The most widely used model for employment
forecasting is the economic base theory.
• It considers demand for goods and services of a city
from sources outside the city boundaries.
• Growth depends on the city’s ability to export goods and
services to pay for its imported goods
• The production of goods and services for export is
known as a basic activity.
- produced in the exogenous sector of the area’s
economy
Non-Basic Activity
- supporting activities to service workers in the
basic industries, their families and the industries
themselves
- Output of goods and services for distribution and
consumption solely within the given area
- Form the endogenous sector of the area’s economy
The level of economic activity in a given
area is measured as the sum of the levels
in these two sectors.
E=B+N
Where E = total employment
B = Basic Employment
N = Non-basic employment
• According to the model, the growth of an urban
area depends upon the ratio of basic to nonbasic activities (economic base ratio)
• The higher the ratio, the greater the rate of
growth.
• Urban growth and thus demand for new building
and other urban development, are determined by
the success of the export base.
Both sectors are related to exogenous demand
The basic sector directly,
The non-basic sector indirectly by supporting the basic
sector
Increase in exogenous demand – generates an
expansion of supporting activities, ultimately in
population
The extent of overall change is a multiple of the
initial injection of basic employment
Growth there depends upon the response of the
basic industries to increased demand from outside.
Economic Base Ratio
Economic Base Ratio = ratio of non-basic
employment to basic employment
E.g. if EBR is 1:2, the injection of an
additional basic job leads to the creation of
two further jobs in the non-basic sector.
Economic Base Multiplier = 3, i.e. when basic
employment increases by 1, a total of 3 new
jobs is created.
E
m
B
P
E
where :
m multiplier
population multiplier
E total employment
B basic employment
P total population
Households
(Employees/
Consumers)
Inputs
Of
Labour
Income
payments
Expenditure
On goods
& Services
Firms
(Employers/ Producers)
Economic System
Supply
of
Goods &
services
Expenditure on
Goods & Services
Households
Income
Imports
Supply
of
Goods &
services
Expenditure
On Goods
& Services
Firms
Production
Addition of Trade
Exports
Supply of goods
& Services
Basic and Non-Basic Activity
Consumers
Inside
Area A
Consumers
Outside
Area A
“Non-Basic”
Activity
“Basic Activity”
Production in
Area A
The Economic Base Study
• First, identify the industries or categories in
the basic and non-basic sectors
• Existing employment in each sector can
then be calculated
• The base ratio and base multiplier can then
be computed using the equations
• Given that E(t)=mB(t)
Then
E(t+n)=mB(t+n)
Where
E= total employment
B= base employment
m= base multiplier
t = base year
t+1 = forecast year
Basic Employment in a Simple Economy
Industrial
Category
Existing basic
Employment in
year t
Historic
percentage annual
employment
growth
Growth factor
For a 10 year
forecast
Forecast basic
Employment in
year t + 10
‘a’
100
3
1.3
130
‘b’
200
2
1.2
240
‘c’
150
5
1.5
225
B (t)=450
B(t+10)=595
As the non=basic ratio is 1:2 and
the base multipier is 3, then:
m
E (t)
B(t)
B(t) N (t)
B(t)
450 900
450
3
Non-Basic Employment in a Simple Economy
Industrial
Category
Existing non-basic
Employment in year
t
Forecast non-basic
Employment in
year t + 10
‘d’
250
330.5
‘e’
300
396.7
‘f’
350
462.8
N(t)=900
N(t+10)=1190
Using the computed value for the base multiplier
And predicted changes in basic employment,
The forecast for total employment is derived as follows:
E ( t 10) mB ( t 10)
3(595)
1785
The total for non-basic employment is therefore:
N ( t 10) E ( t 10) B( t 10)
1785 595
1190
The forecast total for non-basic
employment can now be disaggregated
as follows:
N d ( t 10) E ( t 10) B( t 10)
N e ( t 10)
N f ( t 10)
250
1190
900
330.5
300
1190
900
396.7
350
1190
900
• Urban growth is seen to result from rising export
demand, changes in the level of which have a
multiplier effect on the domestic urban economy.
The success of an area is determined by the
level of diversification of the export sector.
The weaknesses of this theory
It is difficult to differentiate between basic and
non-basic employment in practice;
The basic/non-basic ratio is not constant in
practice;
It underestimates the importance of the nonbasic sector in promoting economic activity;
basic activities may be dependent on non-basic
activities e.g. well-developed services sectors
attract basic industry;
WEAKNESSES continued
– It does not consider the allocation process
performed by the market system nor does it consider
the public allocation system. Actual households in
need may not be allocated new housing.
– It does not consider differences in densities
(“overcrowding”), availability of land, location and
tenure status.
Translating employment to Land
Requirement:
• Break down employment to occupational
sectors
• Obtain floor space per worker ratio by
sectors (surveys, historical)
• Translate floor space to land requirement
using “plot ratio”
Projection of Office Space
Projected Net Office Space:
[Estimated no. of office workers] x Estimated
average net office space per worker]
x [1+10% vacancy rate]
x [1+10% contingency reserve]
Concept of Plot Ratio
Land Savings
Employed
Labour Force
Space Standard
Space Demand
Plot Ratio
Land Demand
Buffer Stock
Land Needs
Population-Based Approach to
Forecasting Land Demand
Rochor
Tampines
Urban Growth Processes
Existing
Later
Growth Period
1.
Resources
1. Natural
Location
Environmental
2. Investment & Growth
Extractive
Comparative
Advantage
3. Adaptation of skills
And size
2. Created
New
Investment
3. Labour
4. Accommodation by
Lenders & Investors
Public
Private
4. Capital
Productive
Capacity
New Productive Capacity
Plant & Equipment
Imported
Capital
Indigenous
Thrift
1. Basic Industries
2. Non-Basic
Industries
Conservation &
Development
Economic
Growth
Basic Industries
Non-basic Industries
New Urban Structure
Housing
Schools
Public Services
Population
Transportation
1.Employed/
Unemployed
Population
Change
Mercantile Outlets
Cultural Opportunities, etc
2. Dependents
3. Retirees
Natural Increase
Migration
Adjusted Population