| Abstract: | In this paper, I model a simple hierarchical inter-urban system in which the location of business firms is considered together with the determination of residential land-use patterns. By supposing a spatial externality between the business firms and all the residents of the region, three spatial structures are obtained: monocentricity, multicentricity, and a separate pattern where cities are spatially split with an agricultural land existing between them. It is also shown that the spatial structures of monocentric and multicentric patterns formed by the market principle tend to be more concentrated than the optimum. |
