Transcript Chapter 10 Cities and Urban Economies

Chapter 10 Cities and Urban
Economies
• Relation between urban growth and
capitalist development
• Central place theory (NOT IN TEXT)
• Economic base model
• Housing markets in urban areas
• Gentrification processes, poverty
• The development of global cities
Cities in Historical Perspective
• Early cities: trading points for agriculture,
as well as bureaucrats, priests, etc.
• City-states – Greek, Roman
• Revival in the renaissance
• Boom along with the industrial revolution:
manufacturing as a “city-forming” sector
• The rise of colonial cities
• The rise of corporate headquarter
concentrations
Vance’s
Exogenic
And
Endogenic
Model of
City System
Development
Central Place Theory
Wasp
Nest
Nearly
Perfect
Hexagonal
Nests
Walter Christaller
Barnacle shells on a beach rock
Average 5.3 sides per barnacle
Simplifying Assumptions:
The Isotropic Plain
The concept: equal properties in all directions:
Flat, no movement barriers
•
Transport costs proportional to distance
•
Equal Quality Environment
•
Population evenly spaced
•
Identical Income Levels, Tastes, Demands
•
Perfect Knowledge: consumers & producers
•
Producers seek to maximize profit
•
Scale economies exist in production
Demand and Supply
Principles
$
D
S
P
S
D
Q(t)
A model of expectations!
Q
A Simple Market Model of Demand for Sausages
Price: $2/ pound
Transport cost: 10 cents/mile each way ($.20 round trip)
Budget: $8 each week for Sausage
Therefore, at the market where TC = 0, 4# each week can
be purchased given this budget for sausages.
At 10 miles: $2 Transport cost (.1 /mile x 10 miles each
way) this leaves $6 for Sausages, or 3# per week.
If travel rises to 40 miles, then travel costs are $8, then
there is no income to use to purchase sausages. This is the
RANGE of the good for this market price and demand
quantity.
Basic Model, Continued
Now, let us assume that the costs of production are
$140,
and for the moment NOT variable with scale
(size of production (Q). This means that the
threshold for the example here is 20 miles of
market extent:
Distance:
Up to 1
up to 10
up to 20
up to 30
# customers
1
6
24
26
Q*P
4x2
3x2
2x2
1x2
Rev
8
36
96
52
Total
8
44
140
192
Demand Cone Principles
Quantity Demanded
Range
Distance
Zero
Distance
Threshold and Range
Relationship
Range
Threshold
Situation:
Demand > Costs
Range
Situation:
Demand < Costs
Threshold
Competition for Customers
Possibly maximum profit
Market area
Unserved customers
The figure suggests that sellers press towards each
other, creating hexagonal market areas and possibly
eliminating excess profits
? How would producers like to set their price? At the level
that maximizes profit, which is at a scale of output where
marginal revenues and marginal costs are equal.
Lösch’s Market Area
Development Sequence
Alternative Spatial Market Areas
Spatial Competition
• If producers behave as spatial
monopolists, then circular market
areas arise, with the range equal
to the market area maximizing
profit.
• If producers behave
competitively, they will pack
together shrinking market area
size until excess profit disappears.
Christaller’s Central Place
Models
•
•
•
•
Marketing Principle
Transportation Principle
Administration Principle
Implications of each for transportation
routes
Marketing Principle
Marketing
Principle
Transport
routes
are not straight
between high
level centers
as they must
also serve
second level
centers (black
lines)
Marketing Principle - Order of Goods
Transportation
Principle
Transport
routes are
straight, passing
through second
order centers
Administrative
Principle
Lösch’s Ten Smallest Market Areas
Lösch’s Model
Lösch’s
System
Of Transport
Lines and
Centers
With
Activity-rich
And
Activity-poor
sectors
Fox & Kumar’s Square Market Areas
Central Place Systems: Evidence
• Hierarchies? Are they out there?
– Groups of functions vs. continuous spread by
size?
– Rank Size models as surrogates
– Rank Stability over time
• Do Consumers Travel as Expected?
– Desire Line Analyses
• Are Centers Spaced as we Expect?
– Nearest-Neighbor Statistical Tests
– Impact of Density of Settlements
Ideal Patterns of Functions
Discrete breaks
# of functions
•
•••
•••••••••
•••••••••••••••••••••••••••
Largest
Rank Size of Place
Smallest
Ideal Patterns of Functions
versus continuous pattern of functions
Discrete breaks
# of functions
•
•••
Actual data show a pattern
in between these alternatives
•••••••••
•••••••••••••••••••••••••••
Largest
Rank Size of Place
Smallest
Lösch’s Test of Spacing of
Central Places in Iowa
Region Theoretical # Actual#
Theoretical Actual
Size
of
of
Spacing Spacing
(Order) Settlements Settlements
1
615
5.6
2
154
153
11.2
10.3
3
39
39
22.4
23.6
4
10
9
44.8
49.6
5
2 or 3
3
89.6
94.0
6
0 or 1
0
179.2
?
Two Examples of Central Place
Hierarchies
S.W. Ontario
# Centers
10
2
2
1
1
1
# Functions
Population
1-12
19-22
28-32
78
99
150
25-1702
408-486
673-676
3507
22,224
77,190
Southwest Iowa
# Centers
29
32
15
9
# Functions
less than 10
10-25
28-50
over 55
Population
less than 150
150-400
500-1500
2000-7000
Isard’s Model With Varying Density
Seyfried’s Urban Hierarchy
Impact of Density on Trade Area Size
Rank-Size Relationships
In many urban systems where population and
rank exhibit a relatively continuous distribution,
the rank-size model predicts well:
Pr = P1 / rq where q tends towards 1.
Example: If P1 = 100,000, q = 1, and rank = 25,
Then P25 = 100,000/25 = 4,000
• U.S. 1790-1950
• U.S. Cities - 1960 - 1998
• Exception: Primate City conditions
Rank Relations Over Time
Rank Position Top 20 U.S. Metro Areas
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
1998
NYC
L.A.
Chicago
Washington D.C.
San Francisco
Philadelphia
Boston
Detroit
Dallas-Ft. Worth
Houston
Atlanta
Miami-Ft. L.
Seattle
Phoenix
Cleveland
Minneapolis
San Diego
St. Louis
Denver
Pittsburgh
1980
NYC
L.A.
Chicago
Philadelphia
San Francisco
Detroit
Boston
Washington D.C.
Houston
Dallas-Ft. Worth
Cleveland
Miami
Pittsburgh
St. Louis
Baltimore
Atlanta
Minneapolis
Seattle
San Diego
Cincinnati
1960
NYC
L.A.
Chicago
Philadelphia
Detroit
San Francisco
Boston
Cleveland
Pittsburgh
St. Louis
Washington, D.C.
Baltimore
Dallas
Minneapolis
Houston
Seattle
Miami
Buffalo
Cincinnati
Atlanta
Movement of Consumers to Central
Places
• Desire lines:
• Beyers hardware lawnmower data
• Overlapping trade areas – Pacific
Northwest data for high order
services
- Eastern Montana
- Southern Idaho
- Southwest Oregon
Source: Preston, The Structure of Central Place Systems
Beyers
Hardware
Lawnmower
Sales
Patterns
Beyers
Hardware
Lawnmower
Sales
Patterns
Spacing of Urban Centers
Tests using “nearest neighbor” statistic:
Index = observed average distance
expected average distance
Expected distance is for a random distribution
Index = 1 for a random distribution
Index = 0 if all places are clustered
Index = 2.15 for a perfect hexagonal pattern
Table 1.6: Mixed results!
Figure 1.23: Impact of settlement density
Uniform Hexagonal R = 2.15
Random R=1.0
Uniform Square R = 2.0
Clustered R=0.0

Spatial Pattern of Settlements
Central Place Theory &
Evidence: Additional Issues
PSRC Vision 2020
Periodic Markets
Movement up and down the hierarchy
Changes in the scope of retailers:
Walmart, Nordstrom; 7-Eleven
Minimarts = gas station + food
The Internet: Homegrocer.com;
Amazon.com
Periodic Market Concept
Individual
Markets
$
AC
AR(2)
AR(1)
Q
AR(1) is revenue from a single market
AR(2) is revenue combined by traveling to all three markets
5 Day Periodic Market System
An Itinerant Merchant in Penedo, Portugal
Skinner’s
Model of
Periodic
Markets
In China