RETAIL AMENITIES AND URBAN SPRAWL |
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Authors: | Stefan Dodds Mati Dubrovinsky |
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Institution: | 1. Department of Economics, University of Winnipeg, Winnipeg, MB R3B 2E9, Canada;2. C.D. Howe Institute, Toronto, ON M5E 1J8, Canada;3. University of Winnipeg |
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Abstract: | This paper examines the interaction between local retail markets and population density in cities. We demonstrate that welfare costs of urban sprawl need not come only from road congestion or environmental externalities, as often suggested in the literature. A city also forgoes potential agglomeration economies in retail when it settles into a spatially sprawling equilibrium. Our theory predicts an additional spatial equilibrium where the city is inefficiently dense, characterized by strong retail agglomeration economies within the core. |
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