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The size of regions with land use for production

Author

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  • Pflüger, Michael
  • Tabuchi, Takatoshi
Abstract
Highlighting market-size effects, the new economic geography has enriched our understanding of the functioning of the space economy. Contrary to its importance in practice, land use for production has received no attention in the branches of the economy, on which the new economic geography puts its focus: goods and services produced under increasing returns. We develop a simple general equilibrium model, an extension of the model by Helpman (1998), in which the increasing returns sector uses land in addition to labor. We identify a sharp contrast: with land use for production, a bell-shaped curve of spatial development can emerge. Such a curve is ruled out, however, if land is used for housing only. In contrast to common explanations for the bell-shaped curve which assume that part of the workforce is immobile, our approach builds on the insight that, ultimately, there is only one immobile resource, land.

Suggested Citation

  • Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
    • Handle: RePEc:eee:regeco:v:40:y:2010:i:6:p:481-489
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    10. Zheng, Wenbo, 2023. "Land supply and industrial agglomeration: Extension of the new economic geography model with land elements incorporated," Land Use Policy, Elsevier, vol. 132(C).
    11. Partridge, Mark D. & Rickman, Dan S., 2012. "Integrating regional economic development analysis and land use economics," MPRA Paper 38291, University Library of Munich, Germany.
    12. Grau, Aaron & Jasic, Svetlana & Ritter, Matthias & Odening, Martin, 2019. "The impact of production intensity on agricultural land prices," FORLand Working Papers 09 (2019), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
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