Environmental Externalities,Median Voters,and the Multicentric City*

Abstract. This paper presents a new theory of the formation of a multicentric city and shows an example where median voters prevail in the social choice of land use patterns. To be specific, environmental externalities of work zones give an incentive to voters to form multiple subcenters in a city even in the absence of agglomeration economies. In addition, the land use pattern chosen closely follows the median voter's preferences under appropriately structured choice process. In this demonstration, zoning is as much the mechanism by which the internal structure of a city is organized as it is the one used to organize the metropolitan fabric of local governments in the Tiebout‐Oates‐Hamilton system.