1. Urban Economics Economics generally studies how markets work
A market consists of a collection of buyers and sellers exchanging goods and services
Urban economics adds the effect physical geography has on the workings of markets

2. Urban Economics
How does physical proximity – between participants in a transaction or in relation to the good transacted – affect markets?
Examples:
What determines variation in housing values across an urban area?
Why are wages higher in areas that are more densely populated?

3. Urban Economics
Urbanization is broadly defined as the concentration of people within an specific area
Roughly 220 million in the US (out of a total population of 300 million) live in urbanized areas. These areas account for just 4% of the US land area
Urbanization decreases the cost of making market transactions
Industrialization in the 18th and 19th century allowed many goods/services that were produced in the home to be acquired through market transactions

4. Growth in industrialization related to urbanization
72% of US output agricultural
17% manufacturing
11% of US pop. lived in urban areas
In 1899:
33% of US output agricultural
53% manufacturing
40% of US pop. lived in urban areas

5. Urban Area
Urban areas are defined by the US Census and change over time
Metropolitan area is the standard term for a urbanized area
A metropolitan statistical area consists of:
at least one densely populated core area of at least 50,000 people and
adjacent communities that are economically integrated with the core

6. Metropolitan Statistical Area
Metropolitan statistical areas are made up of counties
They include the county with the urban core as well as outlying counties
Outlying counties are included in a metropolitan area if
at least 25% of its workers commute to the central county containing the urban core
At least 25% of the jobs in the outlying county are filled by workers living in the central county

7. Metropolitan Statistical Area
Metropolitan areas typically named after the principal cities that make up the area
Southern California includes the metropolitan areas:
2010 population
Los Angeles-Long Beach-Santa Ana (Los Angeles and Orange County)
12,828,837
Riverside-San Bernardino-Ontario (San Bernardino and Riverside County)
4,224,851
San Diego-Carlsbad-San Marcos (San Diego County)
3,095,313

8. Trends in Urbanization
Over the years people have moved from less dense rural areas to urban areas
Rank counties from most to least dense

9. Trends in Urbanization
People have migrated from the middle part of the United States toward the coasts map
Reasons include:
Changing demand for temperate weather
People no longer tied to manufacturing and agriculture that took place in the midwest

10. Trends in Urbanization
While people move to metropolitan areas, the areas themselves have become less dense