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In modern urban areas jobs and residences are connected by commuting and by discretionary travel and consumers sort in land and labor markets according to idiosyncratic attachment, rents, wages and access to products. Our numerical simulations of a spatial general equilibrium model show that unpriced traffic congestion creates excess sprawl causing daily personal travel to be 8 min or 13% longer than optimal. We juxtapose congestion tolls, favored by economists, and urban boundaries, favored by planners, as two alternative policies for eliminating this excess. As explained in Anas and Rhee [Anas, A. and Rhee, H.-J. 2005, When are urban growth boundaries not second-best policies to congestion tolls?, in press in the Journal of Urban Economics], in our dispersed city, a boundary of any stringency is absolutely harmful and is not a second-best policy to congestion tolls. To curb the excess, the planner's boundary must be very stringent causing large distortions in land, labor and product markets while leaving the congestion unpriced. Such a boundary's deadweight loss is 15% of money income and 70 times higher than the benefits of firstbest congestion tolls that curb the sprawl by pricing travel efficiently. This result is robust in sensitivity analyses. Boundaries are efficient when compactness is valued, but tolls are still needed to reduce congestion.

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RELU is a dynamic general equilibrium model of a metropolitan economy and its land use, derived by unifying in a theoretically valid way, models developed by one of the authors []. RELU equilibrates floor space, land and labor markets, and the market for the products of industries, treating development (construction and demolition), spatial interindustry linkages, commuting, and discretionary travel. Mode choices and equilibrium congestion on the highway network are treated by unifying RELU with the TRAN algorithm of stochastic user equilibrium [Anas- Kim (1990)]. The RELU-TRAN algorithm's performance for a stationary state is demonstrated for a prototype consisting of 4-building, 4-industry, 4-labor-type, 15-land-use-zone, 68-link-highway-network version of the Chicago MSA. The algorithm solves 656 equations in a special block-recursive convergent procedure by iterations nested within loops and loops within cycles. Runs show excellent and smooth convergence from different starting points, so that the number of loops within successive cycles continually decreases. The tests also imply a numerically ascertained unique stationary equilibrium solution of the unified model for the calibrated parameters. * Alex Anas dedicates this paper to the memory of Britton Harris , a visionary and devoted advocate for the development of better quantitative models for metropolitan planning.Economic theory is rich in behavioral propositions which are useful in land use and transport modeling, and these fields have often unwisely neglected them. However, the converse is also true, and many of the pragmatic discoveries of modeling contained implications for economic behavior which were long neglected, or even worse denied. . . . planning and simulation have usually recognized that similar people in similar situations exhibit diverse behaviors. Gravity models capture that diversity, while standard economic models like linear programming do not. Only recently have the economists provided an alternative to their Procrustean bed in the form of discrete choice theory.-Britton Harris (1985, p. 547).