Dr. P. W. Wilson Spring 2001 BRB 3.130 Class Time, Location: 8:00-9:30 Tue. and Thu., UTC 1.146 Office hours: 10:00-11:00 Tue. and Thu. or by appointment

Required Text: Edwin S. Mills and Bruce W. Hamilton (1994), Urban Economics (5th edition), HarperCollins College Publishers, New York.

Course Objectives: Urban economics involves application of microeconomic theory to questions arising in urban economies. Examples of such questions include:

Why do cities exist?
Are cities systematically located? How?
What is the nature of the relation between land value and location?
How are housing prices determined?
Why do cities in the third world seem to be growing so fast?
Should large cities build subway systems?
Should private autos be banned within highly congested urban areas?
How are city governments financed, why, and how is social welfare affected?

The focus of the course will be on developing methodologies for answering these and other questions. Although the answers to such questions may be interesting, the methodologies used to arrive at answers are of far greater interest and importance, and will be the focus of the course. Students will be expected to learn methodologies used by urban economists well enough to solve simple problems.

Students who successfully complete this course should gain an understanding of market forces and institutions which shape the urban environment. In addition, students will learn techniques for combining spatial and time dimensions to the price and quantity dimensions typically considered in conventional microeconomic analysis.

Prerequisites: The University course schedule lists ECO 320K or 420K (Microeconomic Theory) as prerequisites for this course. Note that Mathematics 403K and 403L (or 408C and 408D) are listed as prerequisites for ECO 320K and 420K, and hence are also prerequisites for this course. Consequently, I will assume that everyone in this course is familiar with differentiation and integration techniques. Some of the models discussed in the course require extensive use of calculus. Students not proficient with calculus should review differentiation and integration during the first weeks of the semester.

Course Grade Determination: Students are expected to attend all classes during the semester, and to arrive on time for each class. If you are unable or unwilling to do so, then you should not take this class. Grades will primarily be based upon performance on four written examinations (three exams given during the course of the semester, each comprising 15 percent of your final grade, and a final exam comprising 55 percent of your final grade). Other factors which may be considered for purposes of determining course grades include class participation, performance on homework assignments, etc. The dates for the midterm exams will be announced in class. The final will be cummulative, but will likely stress material from the latter part of the course.

No make-up exams will be given under any circumstances. Students who are unable to take one of the three midterm examinations due to serious illness or personal problems will be excused from an exam without penalty (i.e., the weight on the final exam will increase by the amount of the weight on the excused midterm exam) provided (1) they make arrangements with the instructor before the exam and (2) written, verifiable documentation is provided. There will be no exceptions.

Tentative Topics: The following is a tentative outline of the material to be covered during the course (M&H refers to the text by Mills and Hamilton):

M&H-chapters 1-4, appendix B
Location Theory
M&H-chapters 5-7, appendix A
Housing Markets
Basic Model: M&H-chapter 10
Housing Finance: M&H-chapter 11
Public Policy Issues: M&H-chapter 12
Urban Transportation
M&H-chapter 13
Urban Finance
M&H-chapters 8, 14
Urban Pollution
M&H-chapter 15
Urbanization and Economic Development
M&H-chapters 16-17

Since time is a scarce resource, it may not be possible to cover all of these topics in a one-semester course.

File translated from TEX by TTH, version 2.00.
On 12 Jan 2001, 22:17.