Abstract
A rapidly increasing literature in Urban Economics has analyzed the relationship between transportation cost and urban structure. A principle item of concern has been the effects of congestion [2,3,4,6,7]. Less attention has been directed at the effects of multiple transportation modes, which is the subject of this paper. In an earlier paper [1] a complex model of a city with two transport modes was developed and its properties studied using numerical analysis. In this paper a related but simplified model with two modes (subways and roads) is presented. The effect of the addition of a subway is studied further; and in the context of the model, a proof of the relationship between social costs on the one hand, and transport costs, land values and housing values, on the other, is given. In the next section the model is developed. In the second section, the effect of the subway system is studied. The final section, contains the proof concerning social costs.
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