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Article: Coase, spatial pricing and self-organising cities

TitleCoase, spatial pricing and self-organising cities
Authors
Issue Date2001
PublisherSage Publications Ltd.. The Journal's web site is located at http://usj.sagepub.com/
Citation
Urban Studies, 2001, v. 38 n. 11, p. 2037-2054 How to Cite?
AbstractModern computational techniques offer new horizons for urban economics in the form of agent-based simulation frameworks. This paper reports on a cellular automata (CA) simulation in which urban land transforms on the basis of locally optimal bargaining between developers and local communities (local governments). Because CA is an explicitly spatial modelling methodology, the space-time-specific paths to global equilibrium can be observed. Because it is an atomistic methodology (cells represent decision units), it is suitable for articulating microeconomic theories of urban processes including planning. We present a space-time-specific simulation of cities evolving under two alternative planning regimes. In one, the community has property rights and uses planning conditions, planning gain, impact fees and so on to ensure that each development occurs at a socially optimal density. This is a theoretically simplified rendition of the British development control system-simplified in the sense of acting from a position of perfect knowledge and having a single objective of optimising locational externalities. In the other simulation, developers have the right to develop but the community is allowed to make (rather than receive) compensatory payments in order to achieve socially optimal land-use patterns and densities. Decision-making in both systems is local and socially efficient. However, case-by-case ad hoc development control with compensatory exactions has the effect of steering development to the least-polluting locations. Although socially optimal densities can occur under alternative control regimes (as the second simulation demonstrates), the stylised British development control process acts like a decentralised locational pricing system and, by definition, yields a superior land-use pattern than any other style of planning system. At one level, our model articulates the Coasian invariance theorem-the same partial equilibrium outcome can be achieved whichever way the property rights (over land development) fall. At another level, the results demonstrate that in a spatial resource allocation problem such as land-use planning, global equilibrium is not independent of property rights. The total social product in the urban land economy is greater when the community holds rights over development.
Persistent Identifierhttp://hdl.handle.net/10722/183438
ISSN
2015 Impact Factor: 1.934
2015 SCImago Journal Rankings: 1.567
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorWebster, Cen_US
dc.contributor.authorWu, Fen_US
dc.date.accessioned2013-05-27T08:38:06Z-
dc.date.available2013-05-27T08:38:06Z-
dc.date.issued2001en_US
dc.identifier.citationUrban Studies, 2001, v. 38 n. 11, p. 2037-2054en_US
dc.identifier.issn0042-0980en_US
dc.identifier.urihttp://hdl.handle.net/10722/183438-
dc.description.abstractModern computational techniques offer new horizons for urban economics in the form of agent-based simulation frameworks. This paper reports on a cellular automata (CA) simulation in which urban land transforms on the basis of locally optimal bargaining between developers and local communities (local governments). Because CA is an explicitly spatial modelling methodology, the space-time-specific paths to global equilibrium can be observed. Because it is an atomistic methodology (cells represent decision units), it is suitable for articulating microeconomic theories of urban processes including planning. We present a space-time-specific simulation of cities evolving under two alternative planning regimes. In one, the community has property rights and uses planning conditions, planning gain, impact fees and so on to ensure that each development occurs at a socially optimal density. This is a theoretically simplified rendition of the British development control system-simplified in the sense of acting from a position of perfect knowledge and having a single objective of optimising locational externalities. In the other simulation, developers have the right to develop but the community is allowed to make (rather than receive) compensatory payments in order to achieve socially optimal land-use patterns and densities. Decision-making in both systems is local and socially efficient. However, case-by-case ad hoc development control with compensatory exactions has the effect of steering development to the least-polluting locations. Although socially optimal densities can occur under alternative control regimes (as the second simulation demonstrates), the stylised British development control process acts like a decentralised locational pricing system and, by definition, yields a superior land-use pattern than any other style of planning system. At one level, our model articulates the Coasian invariance theorem-the same partial equilibrium outcome can be achieved whichever way the property rights (over land development) fall. At another level, the results demonstrate that in a spatial resource allocation problem such as land-use planning, global equilibrium is not independent of property rights. The total social product in the urban land economy is greater when the community holds rights over development.en_US
dc.languageengen_US
dc.publisherSage Publications Ltd.. The Journal's web site is located at http://usj.sagepub.com/en_US
dc.relation.ispartofUrban Studiesen_US
dc.titleCoase, spatial pricing and self-organising citiesen_US
dc.typeArticleen_US
dc.identifier.emailWebster, C: cwebster@hku.hken_US
dc.identifier.authorityWebster, C=rp01747en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1080/00420980120080925en_US
dc.identifier.scopuseid_2-s2.0-0034797424en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0034797424&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume38en_US
dc.identifier.issue11en_US
dc.identifier.spage2037en_US
dc.identifier.epage2054en_US
dc.identifier.isiWOS:000171202100010-
dc.publisher.placeUnited Kingdomen_US
dc.identifier.scopusauthoridWebster, C=7201838784en_US
dc.identifier.scopusauthoridWu, F=7403463877en_US

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