Purposes of Chapter

1. To examine the monocentric model's predictions as compared with evidence.

2. To examine some of the model's specific assumptions and ask whether more realistic assumptions might lead to different results.

Statistical Evidence

1. If a monocentric model holds then rent, population density, and/or wage gradients are expected to follow a negative exponential function:

ln X(u) = ln Xo - r u

where u is distance from the CBD in miles and r is the percentage rate of decrease per mile.

2. Xo represents the level of rent at the CBD, r is an estimate of the slope of the function. The R-squared of the model determines the "goodness of fit" of the monocentric model.

3. Muth's estimate of residential density shows that the rent gradient is getting flatter and the R-squared is decreasing. This shows that transportation costs savings and the increase in income is flattening the monocentric density gradient. Also, the development of agglomeration economies in outlying areas in resulting in a multinuclear city form.

Housing-Price Gradient

1. The price of housing depends upon many factors, such as property taxes, school quality, air quality, etc. in addition to transportation cost savings. Hence, the price gradient is often upward sloping rather than downward sloping as predicted by the influence of location alone.

2. Population and housing prices vary because of the intensity of land use for housing and the number of persons per household, that increases closer to the CBD.

Wage Gradients

1. Wage gradients decline about 1 percent per mile from the CBD, due to the need to pay higher wages to compensate for commuter costs.

2. Among different cities, higher CBD densities are associated with higher wages because of the need to compensate for higher commuter costs. An increase in population density for a given population results in a wage reduction because of the resulting smaller radius of the city and, hence, the shorter commute of workers living on the edge.

Commuting Patterns

1. The monocentric model predicts that commuting will always be from the suburbs to the central city. Workers are generally willing to commute because housing (land cost) is cheaper at the home end of the commute or other services prevail in the suburbs.

2. Not all jobs are in the CBD, so that some cross commuting may occur, as well as less need for commuting by suburban dwellers. The decentralization of jobs is a function of lower wages and land costs in the suburbs and technologies that lower transportation and communication costs to businesses.

Land Use Succession

1. The monocentric model predicts that land use will be converted among different uses according to its "highest and best use." However, the rate of land use succession is affected by existing structures.

2. It is more difficult to convert from high density to low density land use than the other way around because the demolition cost of more capital intense structures is higher and the payoff is lower because rents are declining overall.

3. Will housing demand reclaim inner city land? Yes if the transport costs savings more than offsets the differences in other factors that draw households to the suburbs (less crime, parks, schools, cleaner air, etc.) These differences are being offset by inner city neighborhood associations in many cities, as well as public policy regarding housing, crime, education, and job accessibility.

Topography and the City's Edge

1. The monocentric circles of land use assume no natural barriers to transportation or existing transport corridors that affect access. This assumption is, of course, unrealistic and will affect the rent gradient.

2. The city's edge is "fuzzy" because of three factors:

a. Agricultural productivity, the next best alternative to urban use, varies with respect to productivity.

b. Farmland comes on the market a specific times in the lifetime of the farmer, rather than continuously as it become profitable for urban use. (Also, there may be tax advantages or land trusts affecting land availability.)

c. Farmers may simply prefer to remain in business rather than sell to urban developers.

3. Speculation may result in parcels of vacant land in urban areas where land is held back until its use is expected to be more profitable. The provision of water, sewer, roads, etc. may effect the future use of these parcels of land.

4. Speculation regarding developed land is also dependent upon the cost of demolition. The cost of demolition can be prohibitive when compared with the value of the cleared land.

5. A strong case can be made for the idea that the operation of land speculators causes developers to make efficient decisions regarded the timing and location of land use based upon the current market value of land versus the present value of its future net benefits. But, the timing of real estate development is a complex and interactive process.

6. Topography affects the monocentric use of land based upon the bedrock (cost of foundations for building) or other natural barriers (lakes, rivers). High rise building need a strong bedrock as a foundation. Otherwise, the skyline will reflect fewer high-rise building than predicted by the rent gradient. (Example of New Orleans).

7. The emergence of agglomeration economies around loops in larger cities will attract CBD activities to outlying areas and result in multinuclear concentrations of land use.

8. Social changes such as the increase in younger two income households is likely to increase the demand for housing in older neighborhoods that are more accessible to the CBD (West University and the Heights in Houston).