Product differentiation, monopolistic competition and city size

Abdel-Rahman, Hesham M.

doi:10.1016/0166-0462(88)90006-3

Cited by 130 publications

(62 citation statements)

References 10 publications

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“…The findings of this paper are consistent with the findings of the well-cited papers by Verhoef and Nijkamp [8,9]. This paper shows that with the presence of pollution optimum city size is not only smaller than the equilibrium city size; it is also smaller than the optimum city size found in Abdel-Rahman's model [10]. It proposes a tax scheme that is necessary for the correct level of agglomeration or the optimum size of the city.…”

Section: Introductionsupporting

confidence: 89%

“…One of the major findings of this paper is that with the presence of pollution optimum city size is not only smaller than the equilibrium city size; it is also smaller than the optimum city size found in Abdel-Rahman's model [10].…”

Section: Literature Reviewmentioning

confidence: 55%

“…The objectives of this paper are: (i) to determine the equilibrium city size with variable, variable coefficient, and fixed coefficient emissions in the production sector, (ii) to find out the optimum city size from the city planners' perspective, and (iii) to find a tax or a subsidy scheme to attain a city size that is socially optimal. In doing so, this paper will extend Abdel-Rahman's model [10] by assuming that production of goods and services in the city increases pollution which city dwellers dislike.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The basic model in this paper is adopted from AbdelRahman's [10] paper, "Product Differentiation, Monopolistic Competition, and City Size," which was recognized by the Nobel Committee while awarding the 2008 Nobel Prize to Paul Krugman for "his analysis of trade patterns and location of economic activity." The Dixit-Stiglitz model [26] of monopolistic competition and consumers' preferences for product variety are key determining forces of the equilibrium and the optimum city size in this model.…”

Section: The Modelmentioning

confidence: 99%

“…The production sector in the city is characterized by a constant return to scale (CRS) sector (good x), and an increasing return to scale (IRS) sector (goods and services z i ), which has the general features of Dixit-Stiglitz [26] model of monopolistic competition. The production sector in this paper closely follows the production sector in Abdel-Rahman's [10] model with additional assumptions that both the CRS and the IRS sectors contribute to higher level of pollution. Different outputemission structures are assumed in three different versions of the pollution model in the next section.…”

Section: The Modelmentioning

confidence: 99%

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Equilibrium and Optimum City Size with the Presence of Pollution

Dewan¹

2011

TOUSJ

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This paper attempts to find the equilibrium and the optimum size of a monocentric open city that produces a constant return to scale good and a group of differentiated goods and services (increasing return to scale goods and services), where the production of goods and services causes negative externalities (pollution). The model in this paper also assumes the presence of positive externalities of agglomeration (agglomeration economies). As it is an open city, there will be too much agglomeration in the absence of any penalty on the polluters. The results of this paper show that if the city dwellers value environmental quality the market outcomes are sub-optimal. Therefore, a tax scheme is necessary for the correct level of agglomeration or the optimum size of the city. The optimal tax rate in the differentiated goods and services sector depends on the emission intensity of output, consumer preference for product diversity, demand for labour (or level of output), and the wage rate; and that in the constant return to scale good sector depends on the emission intensity of output, average labour productivity, and the wage rate.

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Section: Introductionsupporting

confidence: 89%

Section: Literature Reviewmentioning

confidence: 55%

Section: Literature Reviewmentioning

confidence: 99%

Section: The Modelmentioning

confidence: 99%

Section: The Modelmentioning

confidence: 99%

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Equilibrium and Optimum City Size with the Presence of Pollution

Dewan¹

2011

TOUSJ

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City formation with complex landscapes

Fain

2017

Intell Sys Acc Fin Mgmt

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Summary Using simulation methods I explore some of the properties of the new economic geography model using a complex landscape. I introduce landscape complexity by allowing the existence of limited pathways that can be traversed at a lower cost than most other paths. I also introduce a river that may be crossed at limited points and may be used to transport goods. I find that adding complexity substantially alters how many cities form and where they form. Compared with a simple landscape, complex landscapes produce a distribution of city sizes that more closely resemble the actual distribution of city sizes.

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Mobile Capital, Local Externalities, and Industrialization

Fafchamps

1997

Journal of Comparative Economics

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Product differentiation, monopolistic competition and city size

Cited by 130 publications

References 10 publications

Equilibrium and Optimum City Size with the Presence of Pollution

Equilibrium and Optimum City Size with the Presence of Pollution

City formation with complex landscapes

Mobile Capital, Local Externalities, and Industrialization

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