CONTEMPORARY URBANIZATION AND AN OPTIMAL SIZE FOR SOVIET CITIES

Three Leningrad geographers use a recent book by Yu. L. Pivovarov of Moscow as a point of departure to focus on two issues relating to urbanization in the Soviet Union: (1) the nature of the urbanization process; (2) optimal city size. The authors challenge Pivovarov's view that urbanization is a relatively independent socio-historical process in which places evolve on their own from lower forms to higher forms of settlement. They contend that urbanization is closely related to the characteristics of a given socio-economic system and that, in the Soviet Union, it involves not only city growth per se, but the relationship between urban and rural settlement and the penetration of urban life styles into the countryside. On the controversy surrounding optimal size, the writers say that the issue is not to find the ideal size for cities in general, but to set desirable limits for cities of different functional types and, most important, to insure that the infrastructure of cities keeps pace with industrial potential. If industrial development moves far ahead of infrastructure, the authors argue, it is desirable to constrain further growth, especially by keeping out industries that tend to have an agglomerative effect in attracting other industries. Once infrastructure catches up with industrial development, the constraints can be eased and the economies of size inherent in large cities can again come into play.     

URBAN PRODUCTIVITY: CITY SIZE OR INDUSTRY SIZE*

ABSTRACT This paper analyzes the effect of city size and industry size on urban productivity in the food processing industry. Some formulations suggest productivity is associated with industry size rather than city size. However, when allowance is made for the tendency of food processing to locate near relevant raw materials and for regional dummies, there is no support for industry scale economies. Agglomeration effects, associated with city size, do exist. The central estimates are based on the Chan-Mountain version of the translog production function. The results provide information on some facets of the appropriate balance between industrial and agricultural production.     

PRODUCT DIFFERENTIATION,PRICING POLICY AND EQUILIBRIUM*

ABSTRACT. This paper studies the price-location equilibrium of duopolists supplying differentiated goods and competing in a spatial market with elastic demand. We show that a price-location equilibrium exists under all three pricing policies traditionally considered by the literature: f.o.b. mill, uniform delivered, and spatially discriminatory pricing. We also show that firms always cluster at the market center. The second part of the paper studies the endogenous choice of pricing policy. A surprising feature of the resulting equilibrium is asymmetry. The greater the extent to which the goods are substitutes, the more likely is it that one firm will choose f.o.b. pricing and the other price discrimination. Finally, the welfare consequences of the analysis show some interesting trade-offs.     

BASING-POINT PRICING AND INCOMPLETE COLLUSION*

ABSTRACT. It has been contended that basing-point pricing (BPP) is not indicative of anticompetitive behavior because a cartel would never attain maximum profits by using BPP. We disprove this contention. BPP is the profit-maximizing pricing strategy for a cartel that faces competition only at selected locations. In addition, our model explains the emergence of multiple basing points, and establishes that BPP must be consistent with a market-division scheme.     

MILL AND UNIFORM PRICING A COMPARISON*

ABSTRACT. In this paper we examine profit, price, output and welfare under mill and uniform pricing in a monopolistic spatial market with nonlinear demand, a general consumer distribution function, and a general transportation cost function. We show that if demand is convex (concave) then the optimal uniform price minus the average unit transportation cost is lower (higher) than the optimal mill price, output under uniform pricing is lower (higher) than output under mill pricing, and welfare under uniform pricing is lower (higher) than welfare under mill pricing, provided other respective conditions are satisfied.     

SCALE ECONOMIES,REGIONAL EXTERNALITIES,AND THE POSSIBILITY OF UNEVEN REGIONAL DEVELOPMENT*

ABSTRACT. This paper presents a model of regional development which attempts to explain differing patterns of growth in two regions. The model is an extension of Krugman's model of uneven development, but it incorporates not only scale economies within each region but also regional externalities across the regions. Depending on relative magnitudes of net scale economies of the two regions, the model entails different regional development patterns: uneven development, stable or joint development, or a mix of the two. The novel feature of the present model is that different regional development patterns can be explained within the same analytical framework.     

THE OPTIMAL PROVISION OF A CENTRAL PARK IN A CITY*

In this paper, I examine the conditions and decision rules pertaining to the efficient provision of a central park in a city (provision that must satisfy the Samuelson condition). An interesting finding is that an additional opportunity cost that results from competition with residential use must be included to determine the efficient size of a central park. An efficient central park is larger in a city with public landownership than in a city with absentee landownership. Profit maximization and population maximization can be used as decision rules to determine the efficient provision of a central park in both an open city with absentee landownership and one with public landownership. The net benefit of a central park in a closed city with absentee landownership is reflected not only in the land rent or profit, but also in the utility level, while that of a closed city with public landownership is fully reflected in the utility level. It is not feasible to determine the efficient size of a central park for a closed city with either absentee or public landownership solely based on observable market information.     

LOCATION AND SPATIAL PRICING FOR PUBLIC FACILITIES

ABSTRACT. Past analysis of public facility location has generally assumed a single goal, such as cost minimization or welfare maximization, and exogenous spatial pricing. This paper considers optimal facility location under a variety of goals. Furthermore, the facility manager is allowed to engage in freight absorption so that the delivered price to consumers need not reflect actual transportation costs. A systematic interaction among management goals, freight absorption, and the optimal size and spacing of public facilities is found.     

SHARABLE INPUTS,PRODUCT VARIETY,AND CITY SIZES*

In this paper, I investigate some of the causes of city formation in spatial economies. A model is proposed in which an intermediate differentiated input shared by more than one industry is the cause of the formation of diversified cities. The desire of both the traded-good and the local-good industries to employ a variety of inputs from the intermediate industry provides the reason for the agglomeration of the three industries. In addition, the paper contains a comparative-statics analysis of the model in an open and a closed-city framework. It is demonstrated that the larger the city, the more variety of intermediate inputs the city can provide and the more specialized it is in the production of the traded-good. Moreover, the model suggests that different industrial structures will result in different city Sizes.     

SUPPLY ARMS AND OPTIMAL SPATIAL STRUCTURE*

ABSTRACT. A multi-plant producer has sole access to a region, and each of the plants processes a raw material which is drawn from its own exclusive supply area. Under these conditions what spatial structure of production (in terms of plant scale, plant frequency, supply-area size and supply-area shape) will enable region-wide or multi-plant profit to be maximized? The form of this optimal structure is shown to vary with prevailing level of price, which is exogenously determined.     

TOTAL FACTOR PRODUCTIVITY GROWTH AND AGGLOMERATION ECONOMIES IN MANUFACTURING, 1959-73*

ABSTRACT This paper investigates the determinants of productivity growth in the manufacturing sector of states over the period 1959-1973. Special emphasis is placed on isolating the effects of a state's urbanization characteristics on productivity growth. Urbanization characteristics considered include the spatial arrangement of cities along with the standard measures of urbanization. The results indicate that while both scale economies and technical change are related to urbanization characteristics the effects tend to be offsetting; no relationship is found between urbanization and overall productivity growth as measured by total factor productivity growth.     

SPATIAL MONOPSONY AND MONOPOLY PRICING IN A STOCHASTIC ENVIRONMENT*

ABSTRACT. In this paper some of the important properties of the behavior of a spatial monopsonist (monopolist) facing a stochastic supply (demand) curve are derived. Under uncertainty, price setting and quantity setting behavior are no longer equivalent. Hence, spatial price discrimination has to be compared with spatial quantity discrimination with respect to expected profits. I prove three general theorems on how the ranking of the behavioral modes, in terms of expected profit, depends on how the stochastic component enters the supply (demand) and supply (demand) price functions. In particular, I prove that under monopsony one would expect a high probability of excess demand, in the sense that the firm would accept all deliveries at the preset price.