A COMPUTABLE URBAN ECONOMIC MODEL TAKING INTO ACCOUNT OF AGGLOMERATION EXTERNALITY AND FLOOR MARKET

Abstract

Computable urban economic models (CUEMs) have been developed as strong tools for analyzing the effects of urban policies such as transport investment projects. CUEM describes the interaction between land use market and transport market consistent with microeconomic theory. This paper develops a new framework of CUEM considering agglomeration externality and floor market, which are typical aspects of urban area. We furthermore analyze the characteristics of model behavior comparing with the existing CUEMs which consider either of the above two urban aspects.