CRP 4040/5040 and ECON 3855: Urban Economics Spring 2017

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1 Professor Nancy Brooks 217 Sibley Hall phone: blackboard site: blackboard.cornell.edu. CRP 4040/5040 and ECON 3855: Urban Economics Spring 2017 My Office Hours: Mondays 12:30-2:00 and Wednesdays 2:00-3:30. In addition, Rhiannon Jerch will serve as the teaching assistant for this course and will also be available for office hours. Her office hours will be posted on blackboard soon. Course Description: This course introduces students to the concepts, methods and the core models used by economists to study not only cities, towns and regions and their relationships with each other, but, more generally, the interesting spatial aspects and spatial outcomes of decision-making by households and firms. The course will examine the determinants of the characteristics and structure of urban and regional areas (both intra-urban and inter-urban), and consider the causes and consequences of city, suburban and regional development, growth, and decline. We will discuss how issues related to poverty, housing, transportation and education are closely intertwined with the spatial decisions of households and firms. An important component of this course will be the study of the impact and relationship of local, state and federal government tax, spending and land-use policies on urban and regional economies. Urban economics, in this course, will be defined broadly to include some aspects of the related fields of regional economics, real estate economics and economic geography. Learning objectives: This course, as is true in most economics courses, emphasizes both the learning of key concepts and the development of analytical problem-solving skills. General urban planning knowledge covered in this course includes understanding the growth and development of places over time and their location across space. Quantitative and qualitative methods will be used to help us model urban and regional spatial structure and spatial decision-making. Social Justice, governance issues, and growth and development will be included in our discussions of the spatial components of poverty, housing, inequality in education, and urban and regional growth and development. Prerequisites: Urban economics is a field of study within microeconomics. Consequently, a prior course in microeconomics (including CRP 5120 or CRP 5122) is required. Textbook: O Sullivan, Arthur (2012) Urban Economics, McGraw-Hill Irwin, 8 th edition. (A used copy of an earlier edition is probably fine but you will need to check chapter numbers as they may not match those listed on the syllabus.) The additional readings listed below will all be posted on the course blackboard website. In addition, I have put some books on reserve in case you are interested in reading more of the book than the assigned chapters. The books on reserve in the Fine Arts Library are:

2 1. O Sullivan, Arthur (2012) Urban Economics 2. Glaeser, Edward (2011) Triumph of the City 3. McDonald, John and Daniel McMillen (2011) Urban Economics and Real Estate 4. Brooks, Nancy, et. al., (2012) Oxford Handbook of Urban Economics and Planning 5. Breuckner, Jan (2011) Lectures on Urban Economics 6. Krugman, Paul (1991) Geography and Trade 7. McCann, Philip (2013) Modern Urban and Regional Economics 8. O Flaherty, Brendan (2005) City Economics Finally, the optional book-length readings listed below tend to be books that cover interesting historical events, innovations or policies that have significant economic geography and urban economic implications. These optional book-length readings are all excellent books (some of my all-time favorites). If you don t get a chance to read them over the semester you could consider putting them on your summer reading list. Course Requirements and Evaluation: Problem Sets Problem sets will be assigned roughly every other week. There will be between 5 and 7 problem sets this semester. You are welcome to work together in study groups on any problem set, and you will also have at least 1 week to complete the assignment 40%. Midterm A midterm exam will be posted to blackboard on Thursday, March 16 and will be due by the beginning of class on Tuesday, March 21 30% Final Exam The final exam will be posted on the last day of class and due on Tuesday, May 16 no later than 4:00 pm -30%. Both the midterm and the final exams are take-home exams. Academic Integrity Each student in this course is expected to abide by the Cornell University Code of Academic Integrity. Any work submitted by a student in this course for academic credit will be the student s own work, except for group work that is clearly labeled as such on the course assignments. In this course, only problem sets can be submitted as group work, but, even in this case, every student is expected to have answered each question. Problem sets are an opportunity to practice and learn with the support of your peers. They are not an opportunity to free ride on the effort of others. Accommodations for students with disabilities In compliance with the Cornell University policy and equal access laws, I am available to discuss appropriate academic accommodations that may be required for students with disabilities. Requests for academic accommodations are to be made during the first three weeks of the semester, except for unusual circumstances, so arrangements can be made. Course Schedule: January 26-February 2: Why do Cities Exist? Trade, Transportation costs, Returns to scale in production and Agglomeration economies. O Sullivan Ch. 1, 2 and 3 Krugman, Paul (2008) The Increasing Returns Revolution in Geography and Trade. Nobel Prize Speech. Strange, William (2005) Urban Agglomeration entry prepared for the New Palgrave Dictionary of Economics.

3 Glaeser, Edward (2005) Urban Colossus: Why Is New York America s Largest City? World Bank (2009) Reshaping Economic Geography, Ch. 4 and 6 (this reading is optional but you may want to read it both for the content and for the real world examples) Marsh, Peter (2012) ch. 8 of The New Industrial Revolution (Optional but it does contain lots of interesting examples of agglomeration economies) Optional Book-length Reading: Cronon, William (1991) Nature s Metropolis, W.W. Norton Levinson, Marc (2006) The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, Princeton University Press. February 7-16: What determines the sizes of cities and their locations? How are cities of different sizes and locations related? O Sullivan Ch 4 Krugman, Paul (1993) Geography and Trade, Chapters 1 and 2, MIT Press. Krugman, Paul (2011) New Economic Geography, Now Middle Aged Regional Science, vol Lafourcade, Miren and Jaques-Francois Thisse (2011) New Economic Geography: A Guide to Transport Analysis, ch. 4 in the Handbook of Transport Economics, Edward Elgar. Ades, Alberto and Edward Glaeser Trade and Circuses: Explaining Urban Giants Quarterly Journal of Economics, vol. 60, pgs (you can skip the theoretical sections, read for their main findings.) World Bank (2009) Reshaping Economic Geography, Ch. 1 (optional) Fujita, Masahisa (2007) Globalization, Regional Integration and Spatial Economics: An Introduction, ch. 1 of Regional Integration in East Asia (optional) Howe, Daniel (2009) What Hath God Wrought: The Transformation of America, Oxford University Press. February 23- March 2: What role do cities play in the economic growth of a nation? How do we define urban growth and local economic development? Who benefits from local growth in its various forms? What are key tools of urban economic development? What are the spatial equilibrium tradeoffs between cities? O Sullivan Ch. 5 Glaeser, Edward (2011) chapter 2 of Triumph of the City: How our Greatest Invention makes us Richer Smarter, Greener, Healthier and Happier, Penguin Press. Glaeser, Edward (2007) Economic Approach to Cities NBER working paper Bartik, Timothy (1990) Market Failure Approach to Regional Economic Development Optional book-length readings: Glaeser, Edward (2011) Triumph of the City: How our Greatest Invention makes us Richer Smarter, Greener, Healthier and Happier, Penguin Press. (Optional, but highly recommended to read this book in its entirety during the semester) Warsh, David (2006) Knowledge and the Wealth of Nations: A Study of Economic Discovery, W.W. Norton Publishing. Moretti, Enrico (2012) The New Geography of Jobs,

4 March 7- March 16: Analysis of the Spatial Structure of Urban and Suburban Areas with and without government. What determines land rent, housing prices and landuse patterns within metropolitan areas? What are the spatial equilibrium tradeoffs within a city or metropolitan area? O Sullivan Ch. 6, 7 and 9 Harford, Tim (2006) Who Pays for your Coffee ch. 1 of the The Undercover Economist Brueckner, Jan (2011) ch. 2 of Lectures on Urban Economics McCann, Philip (2013) The Spatial Structure of the Urban Economy Ch. 4 of Modern Urban and Regional Economics, Oxford University Press. Anas, Alex, Richard Arnott and Kenneth Small (1998) Urban Spatial Structure Journal of Economic Literature, vol 36, pgs (This is an optional reading) Jackson, Kenneth (1985) Crabgrass Frontier, Oxford University Press. March 21-March 30: Introduction to the theory of local public finance, the tenets of fiscal federalism and the spatial and economic implications of the property tax and zoning. O Sullivan Ch. 16 and 17 Fisher, Ronald (2016) Public Choice through Mobility Ch. 5, Organization of Subnational Government Ch. 6 and Property Tax Ch. 14 of State and Local Public Finance, 4th edition, Routledge. Fischel, William (2001) Ch. 1 and 3 of The Homevoter Hypothesis, Harvard University Press. Oates, Wallace (1999) An Essay on Fiscal Federalism in the Journal of Economic Literature, vol. 37, pgs Dye, Richard and Richard England (2010) Assessing the Theory and Practice of Land Value Taxation, a policy focus report by the Lincoln Institute of Land Policy Youngman, J. (2016) A Good Tax: Legal Policies and Issues for the Property Tax in the U.S., Lincoln Land Institute Press (available online for download) Levine, J. (2006) Zoned Out: Regulation, Markets and Choices in Transportation and Metropolitan Land-Use. Fischel, W. (2015) Zoning Rules! The Economics of Land Use Regulation April 11-18: Urban Policy Issue 1: Transportation, congestion and the relationship between sprawl and transportation options and costs O Sullivan Ch O Flaherty, Brendan (2005) Ch 4 and 5 of City Economics Brueckner, Jan (2011) Ch.5 of Lectures on Urban Economics Green, Richard 9 (1999) Nine Causes of Sprawl Nechyba, Thomas and Randall Walsh (2004) Urban Sprawl Journal of Economic Perspectives. Guiliano, Genevieve (2011) Transportation Policy: Public Transit, Settlement Patterns and Equity in the U.S. in the Handbook of Urban Economics and Planning, Oxford University Press. April 20-27: Urban Policy Issue 2: Real Estate and Housing. O Sullivan Ch. 13 and 14. Green, Richard (2011) Housing Markets, Prices and Policies in the Handbook of Urban Economics and Planning, Oxford University Press.

5 Glaeser, Edward and Joseph Gyourko (2008) Rethinking Federal Housing Policy, chapter 1 and the concluding chapter (but you should feel free to read the entire book-it is well worth reading.) Ellen, Ingrid Gould, Katherine O Regan, and Ioan Voicu (2008) Siting, Spillovers, and Segregation: A Reexamination of the Low Income Housing Tax Credit Program. In Housing Markets and the Economy: Risk, Regulation, and Policy, edited by Edward L. Glaeser and John M. Quigley, Lincoln Institute of Land Policy. O Flaherty, Brendan (2005) ch. 13 and 14 of City Economics Desmond, Matthew (2016) Evicted: Poverty and Profit in the American City, Crown Publishers May 2-9: Urban Policy Issue 3: Income and racial Segregation, Gentrification, Spatial Mismatch and the impact of segregation on equal opportunity especially regarding education O Sullivan Ch. 8 and 12. O Flaherty Ch. 11 and 12 of City Economics Fisher, Ronald (2016) Education Ch. 19 of State and Local Public Finance, 4th edition, Routledge. Jargowsky, Paul (2011) Urban Poverty, Economic Segregation and Urban Policy in the Handbook of Urban Economics and Planning, Oxford University Press. Boustan, Leah Platt (2011) Racial Residential Segregation in American Cities in the Handbook of Urban Economics and Planning, Oxford University Press. Ellen, Ingrid Gould and Katherine O Regan (2011) Gentrification: The Perspectives of Economists and Planners in the Handbook of Urban Economics and Planning, Oxford University Press. Hanushek, Eric and Kuzy Yilmaz (2011) Urban Education: Location and Opportunity in the United States in the Handbook of Urban Economics and Planning, Oxford University Press. Ludwig, Jens, Greg Duncan, Lisa Gennetian, Lawrence Katz, Ronald Kessler, Jeffrey Kling and Lisa Sanbonmatsu (2012) Neighborhood Effects on the Long-Term Well-Being of Low Income Adults Science vol Optional book-length readings: Venkatesh, Sudhir (2006) Off the Books: The Underground Employment of the Urban Poor, Harvard University Press. Goffman, Alice (2014) On the Run: Fugitive Life in an American City, University of Chicago Press. Massey, Douglas and Nancy Denton (1993) American Apartheid: Segregation and the Making of the Underclass, Harvard University Press Massey, Douglas (2007) Categorically Unequal: The American Stratification System, Russell Sage Foundation

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