ECON 155 Lecture Notes - Lecture 8: Urban Decay, Urban Sprawl, Agenda 21
Chapter 4 February 8, 8
• Space
o Farmland is becoming scarce in terms of suitable land for agriculture
o Productivity on currently cultivated land is significantly producing at below potential
o Increases in traffic congestion and pollution for areas that are farmed
o Air pollution in LA decreased over the past 50 years
o Funding for public transportation at all levels have declined since 1962 and flat lined over the past years
(2010)
▪ Public resources have been lacking
o The inner city declines as the rich move into the suburbs with their money. Once the inner city becomes
really poor, investors can come in and develop their lands for cheap
o Whe e sa that ities take up too uh spae hat do e ean? What are we comparing it to? 100
years ago?
• Market failure: he eoois ators fail to ahiee the right outoe fro soiet’s poit of ie
o This is not because the market has failed, it is because the market has succeeded
o “oiet’s poit of ie is not an economic variable in the model
o Market failure suggests that non-market forces have intruded into markets
o Discriminating spatial distributions are evidence of market success (ie: housing values are high in some areas
because of the market)
o The market is working without interest or goals
• Market failure - Open space amenities
o The value of open space is not factored into the market value of rural land
o In cities, consumers signal that they value open space (ie: parks)
o Political actions should be accounted for in the model (ie: electing officials that will tax us for keeping land
puli s. eletig a offiial that o’t ta us eause the ost of keepig the lad puli is too high)
o Brueckner sneaks in a variable that finds fault with urban sprawl
• How does urban blight work?
o Market efficiencies appear on a variety of urban landscapes
o Investors enjoy higher marginal returns on everything except taxes, health, education, etc.
o It costs money to upkeep green spaces
o We sa that arkets fail he constraints fail to achieve desired political outcomes – failure for one
political interest will look like success for another actor in the market
o Economic model needs to account for the political interests of different groups
o The polis (public) should be the body that regulates firms in the public interest. The people are constrained
and cannot exercise control over the firms because they are in control by the firm
• Blight and scatter
o When policymakers seek to control private behavior in private establishments (ie: smoking, eating), they
imply a public cost to private behavior
o When we think individuals as consumers, it changes our model in a dramatic way. This is contrasted to see
individuals as citizens or the public
• UN Agenda 21: conference on environment and development
o There are many members of groups opposed to UN Agenda 21
o Anti-planning groups for urban areas get their funding from David and Charles Koch and additional funding
from the DeVos family
o In our model, all markets including free markets are constrained because entities intervene in markets to
achieve their ends
• UGBs threaten urban amenities such as open space amenities (ie: parks because rents are valued at a higher
marginal rate)
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