Urban Growth and Pattern Formation with Preference Change

Abstract

The main issue in this chapter is preference change. Although preferences for leisure time, housing, food, clothes, traveling and so on are varied over time, only a few urban models explicitly deal with endogenous preference changes (Beckmann, 1990, Kobayashi, Zhang, and Yoshikawa, 1986, 1989). There are dynamic interactions between preference change, production structure and residential location. This chapter constructs a dynamics of preference within the frameworks of growth theory and location theory. We model a dynamic interdependence between urban structure, capital accumulation and preference change in a perfectly competitive economy. The chapter is organized as follows. Section 7.1 defines the model with capital accumulation and preference change. Section 7.2 provides conditions for existence of equilibria and stability. Section 7.3 analyzes the impact of changes in human capital on the equilibrium economic structure. Section 7.5 concludes the chapter. The appendix proves Lemma 7.2.1. This chapter is based on Zhang (1996c, 1998c).