Regional Specialization, Urban Hierarchy, and Commuting Costs

23 Pages Posted: 28 Oct 2006

See all articles by Takatoshi Tabuchi

Takatoshi Tabuchi

University of Tokyo - Faculty of Economics

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Abstract

We consider an economic geography model of a new genre: All firms and workers are mobile and their agglomeration within a city generates costs through competition on a housing market. In the case of two sectors, contrasted patterns arise. When one good is perfectly mobile, the corresponding industry is partially dispersed whereas the other is agglomerated, thus showing regional specialization. When one sector supplies a nontradeable consumption good, this sector is more agglomerated than the other. The corresponding equilibrium involves an urban hierarchy in that a larger array of varieties of the two goods is produced within the same city.

Suggested Citation

Tabuchi, Takatoshi and Thisse, Jacques-François, Regional Specialization, Urban Hierarchy, and Commuting Costs. International Economic Review, Vol. 47, No. 4, pp. 1295-1317, November 2006. Available at SSRN: https://ssrn.com/abstract=940696 or http://dx.doi.org/10.1111/j.1468-2354.2006.00414.x

Takatoshi Tabuchi (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan
+81 3 5841 5603 (Phone)
+81 3 5841 5521 (Fax)

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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