Behavior of the Household with Land
In this chapter, we investigate the behavior of the household with land in order to examine the impact of landownership on residential land use equilibrium. First, we propose a basic model of the household with land. In this basic model, the location of the household is fixed, and hence the location parameter is omitted in the analysis below (equivalently, we may assume that the land is uniform throughout the area in question). In this context, we examine the impact of the level of land rent and the amount of the land owned by the household on its maximum utility and the optimal lot size and the autarkic land rent.
KeywordsMaximum Utility Utility Level Residential Land Urban Economy Indifference Curve
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