Working Paper

Continuous Logit Polycentric City Model

Matthias Wrede
CESifo, Munich, 2014

CESifo Working Paper No. 4580

This paper analyzes a closed, essentially linear polycentric city with homogenous households who probabilistically select their workplace and residence locations. The study utilizes a continuous logit model to describe household location choices. In contrast to the classic urban model with deterministic location choices, the continuous logit model predicts noticeable direct effects of more than one workplace on land rents, asymmetry of the land rent schedule around secondary business districts, incomplete segregation of citizens who work in different business centers and, therefore, cross commuting, and incomplete segregation of workers and farmers.

CESifo Category
Labour Markets
Keywords: urban spatial equilibrium, polycentric city, probabilistic location choices, continuous logit model, cross commuting
JEL Classification: R130, R140, D110