We wish to thank K. Behrens, M. Brülhart, E. Glaeser, V. Henderson, S. Mun, G. Ottaviano, P. Wang, four referees, and the audience of a workshop held at University of British Columbia for helpful comments. This research was supported by the Japanese Ministry of Education and Science (Grant-in-Aid for Science Research 09CE2002 and 13851002) and by the Ministère de l'éducation, de la recherche et de la formation (Communauté française de Belgique), Convention 00/05-262. Please address correspondence to: Takatoshi Tabuchi, Faculty of Economics, University of Tokyo, Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033, Japan. E-mail: firstname.lastname@example.org.
REGIONAL SPECIALIZATION, URBAN HIERARCHY, AND COMMUTING COSTS*
Version of Record online: 27 OCT 2006
International Economic Review
Volume 47, Issue 4, pages 1295–1317, November 2006
How to Cite
Tabuchi, T. and Thisse, J.-F. (2006), REGIONAL SPECIALIZATION, URBAN HIERARCHY, AND COMMUTING COSTS. International Economic Review, 47: 1295–1317. doi: 10.1111/j.1468-2354.2006.00414.x
Manuscript received February 2004; revised January 2005.
- Issue online: 27 OCT 2006
- Version of Record online: 27 OCT 2006
We consider an economic geography model of a new genre: All firms and workers are mobile and their agglomeration within a city generates costs through competition on a housing market. In the case of two sectors, contrasted patterns arise. When one good is perfectly mobile, the corresponding industry is partially dispersed whereas the other is agglomerated, thus showing regional specialization. When one sector supplies a nontradeable consumption good, this sector is more agglomerated than the other. The corresponding equilibrium involves an urban hierarchy in that a larger array of varieties of the two goods is produced within the same city.