How should urban containment and the diversion of households to nearby residential areas be evaluated from a welfare economic perspective? Assuming the existence of a negative externality of city size, we develop a concise general equilibrium model for a mother city and a satellite. This...

After a long period of suburbanization, cities have been in vogue again since the 1980s. But why are people prepared to spend far more money on a small house in the city centre than on a large house in the countryside - and why doesn't this apply to all cities? The authors of this book argue...