When worlds collide: Different comparative static predictions of continuous and discrete agent models with land

B-Tier
Journal: Regional Science and Urban Economics
Year: 2008
Volume: 38
Issue: 5
Pages: 438-444

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper presents a difference in the comparative statics of general equilibrium models with land when there are finitely many agents, and when there is a continuum of agents. Restricting attention to quasi-linear and Cobb-Douglas utility, it is shown that with finitely many agents, an increase in the (marginal) commuting cost increases land rent per unit (that is, land rent averaged over the consumer's equilibrium parcel) paid by the consumer located at each fixed distance from the central business district. In contrast, with a continuum of agents, average land rent goes up for consumers at each fixed distance close to the central business district, is constant at some intermediate distance, and decreases for locations farther away. Therefore, there is a qualitative difference between the two types of models, and this difference is potentially testable.

Technical Details

RePEc Handle
repec:eee:regeco:v:38:y:2008:i:5:p:438-444
Journal Field
Urban
Author Count
2
Added to Database
2026-01-24