Baylor University


Economics 4325

Urban and Regional Economics


Fall 2002

Dr. Tom Kelly

Office:  A.301.2 Hankamer

Phone: 710-4146

Fax: 710-6142


Home Page:



Urban economics is the study of the role that economics plays on the location and concentration of economic activity. It includes micro and macro economic theory, but with many practical applications. Urban areas are unique in that they are characterized by economic benefits as well as problems associated with population density. Upon completion of this course you will be more informed on the role that space has on economic decisions, including where you may locate a potential business or, in the vary least, elect to purchase a house.

The course is absolutely essential for entrepreneurs interested in locating a new business, for marketing majors interested in the role of population density on market demand, for real estate majors interested in patterns of land use and land values, for public administration majors interested in spatial dimensions of housing policy, poverty, transportation, and public finance, and for any person who eventually expects in invest in property in an urban setting. As an economist, I will illustrate numerous applications from my consulting activities.


The course will have four grades, made up of any combination of the following five possibilities:

1. Four exams, each worth 100 points, based upon material in the text (Mills and Hamilton, Urban Economics)

2. An optional 5-page double-spaced paper (with end note references) worth 100 points on a subject matter related to the course or an optional comprehensive final exam worth 100 points.

The topics and scheduled dates of the exams are in the following table. Review questions at the end of the chapters are similar to the ones given on each test (short-answer essay). Test your understanding of the chapter material with the review questions given in the table.


Beginning Dates



Aug. 26

The Nature of Urban Areas.

Review questions for Chapter 1

The Origin of Cities: Central Place Theory

Economic Base Theory & Techniques

County Business Patterns



Sept. 1

Comparative Advantage and Regions:

Review questions for Chapter 2


Sept. 10

Urbanization and Economic Growth in the U.S.

Review questions for Chapters 3 & 4

Growth Pole Theory:

Questions from growth pole theory



Sept. 17

Trends in Sizes and Structures of Urban Areas




Sept.  19

Exam on Chapters 1-4


Sept. 24

Introducing Land and Land Rents into Price Theory

Review questions 1, 2, & 3


Oct. 1

Theoretical Analysis of Urban Structure

Review questions 1, 2, 3, & 4

Supplemental questions for chapters 5 & 6




Oct. 8

A Critical Examination of the Monocentric Model

Review questions 1, 2, & 3

Supplemental questions for chapter 7


Oct. 12

Exam on Chapters 5 - 7


Oct. 15

The Problem of Poverty

Who are the poor?

Welfare reform an urban policy

Economic Development

Review questions 1, 3, & 4

Supplemental review questions for chapter 9



Oct. 19

Fall Break


Oct. 22

The Market for Housing

Review questions 1, 3, 4, & 5


Oct. 29

Housing Problems and Policies

Review questions 1, 2, & 3

Housing policy research:

Section 8 administration

Supplemental review questions for chapters 10 & 12


Nov. 4

Exam 3 on Chapters 9-10 & 12


Nov. 6

Urban Transportation

History of Urban Transportation Planning

Journey-to-work modal choice model

Review questions 1, 3, 4, 5, 7, & 9



Nov. 13

Local Government

Household Sorting

Urban Crime

Review questions 2, 3, & 4


Nov. 20

Pollution and Environmental Quality

Review questions 1, 3, & 4


Nov. 25

Urbanization in Developing Countries

Review questions 2, 4, & 5

Supplemental questions on chapters 13 and parts of chapters 14 - 17





Nov. 27

Thanksgiving Holidays



Topics for Exam 4


Dec. 9

Exam 4 on Chapters 13 and parts of 14, 15 & 17 Study Day (All papers due)