As the interactions among urban activities have increased and complicated, it is urgently demanded to analyze the effects which might be caused by urban policies. The aim of this model is to analyze not only direct effects but also repercussions of urban policies upon citizens' welfare and to assist decision-makers in evaluating policy alternatives and in detecting urban problems in advance. One of the new ideas in this model is that urban activities are grasped from two principal viewpoints of system theory (feedback and hierarchy), and the simulation model is formulated on the basis of this framework. (1) feedback system; Urban activities can be considered as such a feedback system as to maximize citizens' utility (output) by satisfying various demands of citizens (input) Herein exist two main feedback loops, one is with equipment or services (process). administrative control and the other is the influence of the benefit level on the demand pattern. (2) hierarchical system; Urban activities can be considered as a hierarchical system. From the hierarchical points of view, urban activities were categorized into four levels and the relationships between a higher level and a lower level are identified. The met-hod used to build the simulation model was System Dynamics and the method applied to analyze and formulate urban activities was Scenario. Some of model parameters which are highly sociological and psychological were defined on the result of the enquete investigation for administrative officials of Hiroshima city. Concerning Hiroshima city, the long range simulation (20 years) was carried out on this model with regard to several alternative urban policies.
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