Location of Housing and Industry Around a Central Shopping District

57 Pages Posted: 9 Jan 2021

See all articles by Liliana Garrido-da-Silva

Liliana Garrido-da-Silva

Universidade do Porto - Faculdade de Economia (FEP); Universidade do Porto - Centro de Matemática da Universidade do Porto (CMUP)

Sofia B.S.D. Castro

Universidade do Porto - Faculdade de Economia (FEP); Universidade do Porto - Centro de Matemática da Universidade do Porto (CMUP)

Joao Correia‐da‐Silva

Universidade do Porto

Date Written: August 18, 2020

Abstract

We investigate the endogenous emergence of residential and industrial districts around a central shopping district (CSD). Households wish to locate near firms and near the CSD due to commuting costs proportional to distance. Firms wish to locate near households because this reduces the wage they need to pay to attract workers, and near the CSD due to the iceberg cost of transporting their output to the CSD. Depending on the relative magnitude of three cost parameters (commuting to work, commuting to shop, transporting output), different urban structures arise. If the cost of commuting to shop is large and the cost of commuting to work is small (relatively to the cost of transporting output), households locate in the centre and firms in the periphery. The opposite occurs if both costs are very small. If the cost of commuting to shop is small and that of commuting to work is large, housing and industry become integrated. Complex urban structures emerge in intermediate cases.

Keywords: Urban Structure, Land Use, Commuting Costs

JEL Classification: R12, R14, R31

Suggested Citation

Garrido-da-Silva, Liliana and Castro, Sofia B.S.D. and Correia‐da‐Silva, Joao, Location of Housing and Industry Around a Central Shopping District (August 18, 2020). Available at SSRN: https://ssrn.com/abstract=3710912 or http://dx.doi.org/10.2139/ssrn.3710912

Liliana Garrido-da-Silva (Contact Author)

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Universidade do Porto - Centro de Matemática da Universidade do Porto (CMUP) ( email )

Rua do Campo Alegre
Porto
Portugal

Sofia B.S.D. Castro

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Dr. Roberto Frias
s/n
4200-464 Porto, 4200-464
Portugal

Universidade do Porto - Centro de Matemática da Universidade do Porto (CMUP) ( email )

Rua do Campo Alegre
Porto
Portugal

Joao Correia‐da‐Silva

Universidade do Porto

Rua Dr. Roberto Frias
4200-464 Porto
Portugal

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
55
Abstract Views
262
rank
511,477
PlumX Metrics