A COMPUTABLE GENERAL EQUILIBRIUM MODEL OF THE CITY: IMPACTS OF TECHNOLOGY, ZONING, AND TRADE

This paper presents a computable general equilibrium model of a stylized linear city that simultaneously minimizes transportation costs while satisfying labor, and, and goods equilibrium conditions, in the tradition of Anas and Kim, while introducing a monetary balance. This model has structural similarity with Davis’s design of an optimal transportation system under user equilibrium conditions. The model includes three industries: manufacturing, retail, and services. Their economic transactions are empirically modeled using national input – output data, which allows for the endogenous determination of import and export pricing and flows. Numerical applications show that more efficient transportation increases utility and leads to a centralization of the population, and that zoning, under various restriction scenarios, decreases utility, with the most detrimental effects on residents in unrestricted zones. Finally, a zero trade deficit scenario results in lower utility, a larger transportation system, and smaller residential lots, with higher CBD population density. Keywords: computable general equilibrium, land use and transportation, regional planning, trade, zoning, input – output data