Alonso and the Scaling of Urban Profiles

TL;DR

This paper extends the Alonso model with power laws to explain how urban density profiles scale with population, aligning theory with empirical European city data and highlighting the need to revisit existing economic assumptions.

Contribution

It introduces a micro-economic model incorporating scaling laws to connect intra-urban structure with urban population growth, bridging a gap in urban scaling research.

Findings

The augmented Alonso model aligns with observed European urban density scaling.

It challenges current assumptions about wage and transport cost elasticities.

It suggests a different scaling for land profiles than previously observed.

Abstract

The scaling of urban characteristics with total population has become an important research field since one needs to better understand the challenges of urban densification. Yet urban scaling research is largely disconnected from intra-urban structure. In contrast, the monocentric model of Alonso provides a residential choice-based theory to urban density profiles. However, it is silent about how these profiles scale with population, thus preventing empirical scaling studies to anchor in a strong micro-economic theory. This paper bridges this gap by introducing power laws for land, income and transport cost in the Alonso model. From this augmented model, we derive the conditions at which the equilibrium urban structure matches recent empirical findings about the scaling of urban land and population density profiles in European cities. We find that the Alonso model is theoretically compatible with the observed scaling of population density profiles and satisfactorily represents European cities. This compatibility however challenges current empirical understanding of wage and transport cost elasticities with population, and requires a scaling of the housing land profile that is different from the observed. Our results call for revisiting theories about land development and housing processes as well as the empirics of agglomeration benefits and transport costs.