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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
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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?
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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 18 th and 19 th century allowed many goods/services that were produced in the home to be acquired through market transactions
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Growth in industrialization related to urbanization In 1839: 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
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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: A.at least one densely populated core area of at least 50,000 people and B.adjacent communities that are economically integrated with the core
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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 A.at least 25% of its workers commute to the central county containing the urban core B.At least 25% of the jobs in the outlying county are filled by workers living in the central county
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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
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Trends in Urbanization 1.Over the years people have moved from less dense rural areas to urban areas Rank counties from most to least dense
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Trends in Urbanization 2.People have migrated from the middle part of the United States toward the coasts mapmap Reasons include: Changing demand for temperate weather People no longer tied to manufacturing and agriculture that took place in the midwest
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Trends in Urbanization 3.While people move to metropolitan areas, the areas themselves have become less dense
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