1. URBAN ECONOMICS SPRING 2011

2. Introduction Urban Economics emphasize: The spatial arrangements of households, firms and capital in metropolitan areas; The externalities which arise from the proximity of households and land uses; The public policy issues which arise from the interplay of these economic forces.

3. What is an urban area? A contiguous area with a population of at least 2,500 to 25,000 (occassionally 50,000) people in which a majority resident workers are in nonagricultural sectors and possibly having a minimum population density (Mills, 2000;8). A geographical area is considered “urban” if it contains a large number of people in a relatively small area.

4. Metropolitan area and municipality Metropolitan area: An area containing a large population nucleus and the nearby communities that are integrated, in an economic sense, with the nucleus. The nucleus is either a city with a population greater than 50000 people or an urbanized area. Municipality: An area over which a municipal corporation exercises political authority, providing local government services such as sewerage, crime protection, fire protection, etc.

5. Why do urban areas exist? Main reason: Proximity among diverse activities economizes on cost of moving goods, people and information. Urban areas have advantages since they provide: Economies of scale; Economies of scope; Agglomeration economies.

7. Population densities (people/sq km) 1.Manila (43079) Phillipinnes 2.Yonghe Taiwan (ROC) 8. Delhi India 38. Paris France 46. Athens Greece New York 2049 Istanbul 1937 Izmir 285 Ankara 156 Tunceli 12

8. Historical development of cities Near east around 3000 B.C. Mesopotamia Valley: City states 2000 B.C. : Babylon Shortly after agricultural breakthroughs that generated a surplus of food. Defensive city: Scale of economies in storage Religious city: Worship at a greater scale

9. Historical development of cities Greek city sites (500 B.C.) – Athens: largest one, market city, population: 150000 – Sparta: Population: 40000 Roman Empire : Colonial cities, 3rd century A.D. Feudal cities: 11th-14th centuries England (London), Byzantine Empire, Muslim areas of Spain Urban market developed : Exchange of local agriculture and handicrafts

10. Historical development of cities Mercantile cities 15th century in Europe Due to long distance trade and shift of power from feudal lords to princes, kings and queens. Industrial revolution Period from 18th to 19th century Innovations in manufacturing, transportation and construction methods: Factory cities; city size incerased.