Essays on congestion, agglomeration, and urban spatial structure

2014-11-17While traffic congestion is considered an important source of diseconomies in theories of agglomeration economies, only a few studies measure the effects congestion costs empirically. My study seeks to fill in this gap by directly estimating the economic impact of traffic congestion at the intra-metropolitan scale. Three major questions are addressed in my dissertation: 1) What is our current knowledge on agglomeration economies and congestion costs, in terms of their effective geographic extents, the methods for measuring them, and the methods for unraveling their separate effects? 2) Do congestion-induced travel time delays adversely affect locations' attractiveness to firms when potential benefits of agglomeration are controlled? 3) Does traffic congestion negatively affect single-family housing values by inducing commuting delays and reducing locations' accessibility premiums? ❧ To answer these questions, I review prior theoretical and empirical studies on agglomeration and congestion to summarize the mechanism by which traffic congestion influences the urban economy and urban spatial structure. Using the 2001‐2005 establishment-level data from the National Establishment Time Series (NETS) dataset and the 2001‐2005 disaggregate housing sales data from the DataQuick dataset, I examine the impacts of traffic congestion on intra-urban business and residential geography through the lens of firms’ location choices and households' bid-up prices for housing units, respectively. Specifically, I empirical test whether and to what extent congestion-induced travel time delays are costly to firms and households in their location decisions within a metropolitan area, how these influences differ at different geographic extents, and how these influences vary across firms of different industrial sectors and home buyers of different income groups. Focusing on the Los Angeles region, the results indicate that metro-wide congestion delays negatively influence firm location and housing price, while local congestion delays will not impose a drag on otherwise high levels of agglomeration benefits until reaching a threshold. I also find that firms valuing proximity (or agglomeration benefits), such as those specialized in the information, finance and insurance and services sectors, are more likely to endure congestion costs than those production-related firms and retail firms. Moreover, compared with those in lower-income and upper-income groups, households in middle-income neighborhoods are more responsive to commuting costs and congestion costs. In sum, my study provides new evidence that congestion costs matter to urban spatial structure by altering the accessibility patterns and inhibiting additional agglomeration benefits at the intra-metropolitan scale