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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.

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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
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
slide3

Vance’s

Exogenic

And

Endogenic

Model of

City System

Development

central place theory
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

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
Demand and Supply Principles

$

D

S

P

S

D

Q(t)

Q

A model of expectations!

a simple market model of demand for sausages

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.

slide9

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: # customers Q*P Rev Total

Up to 1 1 4 x 2 8 8

up to 10 6 3 x 2 36 44

up to 20 24 2 x 2 96 140

up to 30 26 1 x 2 52 192

demand cone principles

Demand Cone Principles

Quantity Demanded

Range

Zero

Distance

Distance

threshold and range relationship
Threshold and Range Relationship

Range

Threshold

Range

Situation:

Demand > Costs

Situation:

Demand < Costs

Threshold

competition for customers
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.

spatial competition

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
Christaller’s Central Place Models
  • Marketing Principle
  • Transportation Principle
  • Administration Principle
  • Implications of each for transportation routes
slide18

Marketing

Principle

Transport

routes

are not straight

between high

level centers

as they must

also serve

second level

centers (black

lines)

slide20

Transportation

Principle

Transport

routes are

straight, passing

through second

order centers

slide24

Lösch’s

System

Of Transport

Lines and

Centers

With

Activity-rich

And

Activity-poor

sectors

central place systems evidence

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
Ideal Patterns of Functions

Discrete breaks

• • •

# of functions

• • • • • • • • •

• • • • • • • • • • • • • • • • • • • • • • • • • • •

Largest

Rank Size of Place

Smallest

ideal patterns of functions versus continuous pattern of functions
Ideal Patterns of Functionsversus continuous pattern of functions

Discrete breaks

• • •

Actual data show a pattern

in between these alternatives

# of functions

• • • • • • • • •

• • • • • • • • • • • • • • • • • • • • • • • • • • •

Largest

Rank Size of Place

Smallest

l sch s test of spacing of central places in iowa

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

Two Examples of Central Place Hierarchies

S.W. Ontario

# Centers # Functions Population

10 1-12 25-1702

2 19-22 408-486

2 28-32 673-676

1 78 3507

1 99 22,224

1 150 77,190

Southwest Iowa

# Centers # Functions Population

29 less than 10 less than 150

32 10-25 150-400

15 28-50 500-1500

9 over 55 2000-7000

rank size relationships

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

movement of consumers to central places

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

spacing of urban centers

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

slide48

Uniform Hexagonal R = 2.15

Uniform Square R = 2.0

Random R=1.0

Clustered R=0.0

central place theory evidence additional issues

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
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

slide57

Skinner’s

Model of

Periodic

Markets

In China