Economic Measurement of Optimal City Size: The Case of West Sumatra, Indonesia

Abstract

This is an empirical study of economic measurement of the optimal size of seven cities in West Sumatra region, Indonesia. The empirical findings are quite interesting since the calculated optimal city size does not result in a single measure as mostly previous studies found, but they vary in accordance with the economic approaches used. The optimal city size measured by using the maximum profit approach would have been larger in size compared to those measured by the minimum cost and maximum net benefit approaches. Meanwhile, the cities measured by using the maximum net benefit have larger size than those of the minimum cost. Unlike previous studies, the measurement of optimal city size in this study is performed in terms of population density rather than the total population, in order to consider the influence of land area to the optimal city size. Moreover, by using the population density, the optimal city size becomes a relative index which enables us to compare it with the related size in other regions.

Optimal Island City Capacity: Ternate City Case

“…This study refers to research conducted by Sjafrizal et al with the West Sumatra case study (Sjafrizal et al, 2016). The study drew on the Allonso-Richardson model, which economically analyzed the optimal city size based on the city's population density.…”

“…As with the character of Ternate City as an island city, optimal city measurements, like previous studies, will be one of the optimal standard references of island cities. Optimal city measurement from an economic point of view includes three approaches (Imelda et al, 2020;Sjafrizal et al, 2016) The minimum cost per capita approach is the minimum cost minimization of city management per capita (cost minimization), which in this study used data on the value of expenditure realization in APBD per capita in Ternate city. The formulation of the minimum cost equation per capita is:…”

“…Through their study, Imelda et al (2020) contended that the population and population growth significantly affect the city's optimal size. As adopted in this island city study, one approach in measuring the optimal density of cities is analyzing its optimal size from an economic point of view developed by Allonso-Richardson (Sjafrizal et al, 2016). In this case, optimal city measurement is focused on three economic approaches: minimum average cost, maximum net gain, and maximum long-term profit.…”

“…For the characteristics and development of the island city, especially the city of Ternate, it becomes essential to measure the capacity of the island city. One approach in measuring urban capacity was developed by Allonso-Richardson (Sjafrizal et al, 2016), analyzing the relationship between population numbers and city management costs per capita and the per capita benefits of growing economic activity. Residents become essential keys in developing a city, including island cities.…”

Economic Growth, Investment, Economics Agglomeration, And Regional Development Inequality In West Java Province

“…Likewise, population concentration in and around big cities is usually followed by income inequality between regions. A similar view was also expressed by [33] who said that the high concentration of economic activity would encourage development inequality between regions. This concentration is reflected in agglomeration activities.…”