Urban comparative statics when commuting cost depends on income

Abstract

This article investigates the comparative-static properties of an urban model where commuting cost is a function of income. In the standard urban model [Wheaton, W.C., 1974. A comparative static analysis of urban spatial structure. J. Econ. Theory 9, 223–237] commuting cost depends only on distance, but a more realistic formulation makes commuting cost per mile an increasing function of income. In contrast to the results based on the standard urban model, land rent at the central business district rises as income grows if the time cost of commuting is greater than the operating cost.