Optimal cities
Document Type
Journal article
Source Publication
Urban Studies: An International Journal of Research in Urban Studies
Publication Date
10-1-1989
Volume
26
Issue
5
First Page
510
Last Page
516
Publisher
Sage Publications Ltd.
Abstract
Using a simple model, this paper demonstrates that efficient pricing of factors of production within the city may make a city efficient, yet this does not guarantee that the equilibrium city size will be optimal. Efficiency only means that whatever service level is produced is produced at minimum cost. The failure to take account of the size dimension not only means that a city may be too big or too small, but also means that the service level is non-optimal. The analysis suggests that rather than relying on property taxes to finance municipal expenditures, which tends to make production inefficient, an optimal city should impose a residence tax that equates the benefit of the last resident admitted to the marginal cost of servicing that resident. The central government should be responsible for income redistribution matters as well as revenue transfer between profitable and unprofitable cities.
DOI
10.1080/00420988920080571
Print ISSN
00420980
E-ISSN
1360063X
Publisher Statement
Copyright © 1989 Sage Publications Ltd
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Ho, L. S. (1989). Optimal cities. Urban Studies, 26(5), 510-516. doi: 10.1080/00420988920080571