Urban growth controls and intercity commuting

This paper incorporates the possibility of intercity commuting (IC) in a growth control model. As controls restrict the labor supply, the wage rate increases in the city. Land rents capitalize the wage differential, but when this differential reaches the IC cost, IC starts to occur, keeping wages constant. Thus, if controls are adopted in the benefit of landowners, IC weakens the incentive for tighter controls compared to case where IC is not possible. However, if firms ’ profits (which decrease with higher wages) are also taken into consideration in the choice of controls, then the possibility of IC may induce tighter controls