Housing and Commuting in an Extended Monocentric Model

We model a city in which jobs are exogenous and distributed across an extended business area in which transport has a nonzero cost. Households are homogeneous in terms of utility and gross income, but each household chooses its residential location on the basis of its place of employment, which is deemed to be fixed. Equilibrium conditions for this residential location market are established. It is shown that there is an equilibrium that is unique (for a closed city with absentee landlords). Households' utility and dwelling size increase the farther the workplace is from the centre, whereas land rent decreases. Within a simplified framework, the model is resolved analytically and we establish the sensitivity of the endogenous variables to the city's characteristic parameters. Two extreme cases are highlighted: the “quasi-monocentric” city where net income decreases with distance from the centre, versus the “eccentric” city, where net income increases with distance from the centre