ECON 166 Lecture 2 J. M. Pogodzinski
Broad Themes in the Course Measurement Theory Policy 8/27/2014 J. M. Pogodzinski 2
Measurement What is urban? What is the record of urban growth? What is distinct about urbanness? 8/27/2014 J. M. Pogodzinski 3
Measurement Definitions of urban rely on threshold (minimum) levels of: Numbers of people (population) and Density (people per acre) There are several issues with the definition Leaves open the question of whether the people must reside in the area or just congregate in the area (e.g., the difference between residents and workers daytime population ) Should the number of individuals be counted, or the number of households, or the number of family households? Should density per acre of land be measured, or density per square foot of floor area? (The density per acre of land is affected by the substitution of structure capital for land [building up]; the density per square foot of floor area is affected by relative prices of substitutes and complements to floor area and by income.) 8/27/2014 J. M. Pogodzinski 4
Metropolitan Statistical Areas (MSAs) MSA whole counties that contain a central city of at least 50,000 population, including whole counties adjacent to the county containing the central city if there is a significant amount of commuting to the county containing the central city MSA the normal case San Jose Detroit MSA oddities: Atlanta San Francisco New York City
Metropolitan Statistical Areas (MSAs) Why counties? Boundaries do not change (often); Lots of data for counties. Downside: Definition of Metropolitan Statistical Area changes when commute patterns change What if county is in one MSA and also satisfies commute threshold to be county associated with another MSA?
Metropolitan Areas Micropolitan Areas Urban Areas terms http://www.census.gov/population/metro/ http://www.census.gov/geo/reference/gtc/gtc_cbsa.html http://www.census.gov/geo/reference/terms.html Combined Statistical Areas (CSAs) Core Based Statistical Areas Also, central city, inner ring of suburbs, outer ring of suburbs
Some Data About MSAs Download and review MSAs_Economic_Characteristics.xls from course website Source of this data is the American Community Survey (ACS) accessed through the American Factfinder (Version) 2 website: http://factfinder2.census.gov/faces/nav/jsf/pa ges/index.xhtml 8/27/2014 J. M. Pogodzinski 8
MSAs Ranked by Population and Median Earnings MSA Rank Population Rank Median Earnings New York-Northern New Jersey-Long Island, NY-NJ-PA Metro Area 1 9 Los Angeles-Long Beach-Santa Ana, CA Metro Area 2 52 Chicago-Joliet-Naperville, IL-IN-WI Metro Area 3 19 Dallas-Fort Worth-Arlington, TX Metro Area 4 22 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area 5 11 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 6 75 Houston-Sugar Land-Baytown, TX Metro Area 7 26 Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area 8 1 Atlanta-Sandy Springs-Marietta, GA Metro Area 9 32 Boston-Cambridge-Quincy, MA-NH Metro Area 10 6 San Francisco-Oakland-Fremont, CA Metro Area 11 4 Detroit-Warren-Livonia, MI Metro Area 12 46 Phoenix-Mesa-Glendale, AZ Metro Area 13 38 Riverside-San Bernardino-Ontario, CA Metro Area 14 68 Seattle-Tacoma-Bellevue, WA Metro Area 15 8 Minneapolis-St. Paul-Bloomington, MN-WI Metro Area 16 10 San Diego-Carlsbad-San Marcos, CA Metro Area 17 24 Tampa-St. Petersburg-Clearwater, FL Metro Area 18 57 St. Louis, MO-IL Metro Area 19 33 Baltimore-Towson, MD Metro Area 20 5 Denver-Aurora-Broomfield, CO Metro Area 21 14 San Juan-Caguas-Guaynabo, PR Metro Area 22 93 Pittsburgh, PA Metro Area 23 43 Portland-Vancouver-Hillsboro, OR-WA Metro Area 24 37 Orlando-Kissimmee-Sanford, FL Metro Area 25 82 Sacramento--Arden-Arcade--Roseville, CA Metro Area 26 27 Cincinnati-Middletown, OH-KY-IN Metro Area 27 34 Cleveland-Elyria-Mentor, OH Metro Area 28 42 San Antonio-New Braunfels, TX Metro Area 29 79 Kansas City, MO-KS Metro Area 30 21 Las Vegas-Paradise, NV Metro Area 31 56 San Jose-Sunnyvale-Santa Clara, CA Metro Area 32 2 Columbus, OH Metro Area 33 25 Charlotte-Gastonia-Rock Hill, NC-SC Metro Area 34 39 8/27/2014 J. M. Pogodzinski 9
New York-Northern New Jersey-Long Dallas-Fort Worth-Arlington, TX Metro Houston-Sugar Land-Baytown, TX Boston-Cambridge-Quincy, MA-NH Phoenix-Mesa-Glendale, AZ Metro Area Minneapolis-St. Paul-Bloomington, St. Louis, MO-IL Metro Area San Juan-Caguas-Guaynabo, PR Metro Orlando-Kissimmee-Sanford, FL Metro Cleveland-Elyria-Mentor, OH Metro Area Las Vegas-Paradise, NV Metro Area Charlotte-Gastonia-Rock Hill, NC-SC Providence-New Bedford-Fall River, RI- Milwaukee-Waukesha-West Allis, WI Memphis, TN-MS-AR Metro Area Hartford-West Hartford-East Hartford, Raleigh-Cary, NC Metro Area Salt Lake City, UT Metro Area Tulsa, OK Metro Area Albuquerque, NM Metro Area Dayton, OH Metro Area Oxnard-Thousand Oaks-Ventura, CA Bakersfield-Delano, CA Metro Area Columbia, SC Metro Area Knoxville, TN Metro Area McAllen-Edinburg-Mission, TX Metro Charleston-North Charleston- Toledo, OH Metro Area Colorado Springs, CO Metro Area Boise City-Nampa, ID Metro Area Youngstown-Warren-Boardman, OH- Deltona-Daytona Beach-Ormond MSAs Ranked by Population and Median Earnings 100 90 80 70 60 50 40 30 20 10 0 Rank Population Rank Median Earnings 8/27/2014 J. M. Pogodzinski 10
What is a unit simplex? The unit simplex (the simplex defined by having all values sum to one) is a set of numbers nonnegative numbers x i 0 such that Σ i x i = 1. The unit simplex can be used to represent all relative values among a set of non-negative numbers in a standard way. For any given set of non-negative numbers, take the sum of these numbers and divide each number by the sum. The resulting set of numbers will lie on the unit simplex, i.e., they will sum to one. 8/27/2014 J. M. Pogodzinski 11
New York-Northern New Jersey-Long Dallas-Fort Worth-Arlington, TX Metro Houston-Sugar Land-Baytown, TX Boston-Cambridge-Quincy, MA-NH Phoenix-Mesa-Glendale, AZ Metro Area Minneapolis-St. Paul-Bloomington, St. Louis, MO-IL Metro Area San Juan-Caguas-Guaynabo, PR Metro Orlando-Kissimmee-Sanford, FL Metro Cleveland-Elyria-Mentor, OH Metro Area Las Vegas-Paradise, NV Metro Area Charlotte-Gastonia-Rock Hill, NC-SC Providence-New Bedford-Fall River, RI- Milwaukee-Waukesha-West Allis, WI Memphis, TN-MS-AR Metro Area Hartford-West Hartford-East Hartford, Raleigh-Cary, NC Metro Area Salt Lake City, UT Metro Area Tulsa, OK Metro Area Albuquerque, NM Metro Area Dayton, OH Metro Area Oxnard-Thousand Oaks-Ventura, CA Bakersfield-Delano, CA Metro Area Columbia, SC Metro Area Knoxville, TN Metro Area McAllen-Edinburg-Mission, TX Metro Charleston-North Charleston- Toledo, OH Metro Area Colorado Springs, CO Metro Area Boise City-Nampa, ID Metro Area Youngstown-Warren-Boardman, OH- Deltona-Daytona Beach-Ormond MSA Relative Population and Relative Earnings Represented on Unit Simplexes 0.12 0.1 0.08 0.06 0.04 0.02 0 Population_Simplex Earnings_Simplex 8/27/2014 J. M. Pogodzinski 12
Stylized Facts American cities grow by annexation American cities are characterized by jurisdictional fragmentation 8/27/2014 J. M. Pogodzinski 13
Main Case Studies Detroit San Jose 8/27/2014 J. M. Pogodzinski 14
Theory Urban economics centers on the interplay of these main factors: Scale economies Externalities or spillovers Transportation costs In addition, we will consider some additional factors, like Diversity of demand Mobility Sorting Transaction costs 8/27/2014 J. M. Pogodzinski 15
Policy Approach to policy begins by defining a goal or desiderata A variety of policy issues are addressed by Glaeser We will apply some policy analysis to case studies of San Jose and Detroit 8/27/2014 J. M. Pogodzinski 16
Readings on Efficiency When Value Judgments Masquerade as Science http://economix.blogs.nytimes.com/2010/08/27/when-value-judgmentsmasquerade-as-science/?scp=2&sq=uwe%20reinhardt&st=cse Is More Efficient Always Better? http://economix.blogs.nytimes.com/2010/08/20/is-more-efficient-always-better/ Kenneth Arrow, Uncertainty and the Welfare Economics of Medical Care http://sws.bu.edu/ellisrp/ec387/papers/1963arrow_aer.pdf