| Abstract: | ABSTRACT. This paper analyzes the effect of eliminating apartheid land-use restrictions in South Africa using a simplified version of the standard urban model. When freedom of residential location is granted, black township residents compete for land near the center of the core cities, pushing white residents to less accessible locations. Black consumption rises and white consumption falls in response, but the increase in total land rent is sufficient to compensate for white losses. The resulting aggregate welfare gain is a natural consequence of eliminating the distortion imposed by the apartheid system. These conclusions are robust to a number of modifications of the basic model. |
