The basic theory of the supply of space was set out in Chapter 4. From it we derived three testable predictions about the relationship between land values, property values, density, and distance from the city centre, and these predictions were confirmed by the evidence presented in Chapter 5. From this we concluded that the theory is reasonably realistic, and in Chapter 6 the theory was used as the basis for a discussion of the characteristics of equilibrium in the market for space in the city. If the market for space is considered in more detail, however, certain of the assumptions made in Chapter 4 may be thought unrealistic. In this chapter we digress from the main argument to consider the implications of altering two of them, in order to determine the possible implications for the theory of residential location.
KeywordsPhysical Deterioration Residential Location Space Unit Optimal Capital Perfect Competition
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