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Urban Spatial Structure with Open Space

Urban open spaces such as parks, open squares, parkways, etc, are considered as amenity resources or local public goods and incorporated into neoclassical urban land-use theory. Models characterizing Pareto efficient allocations and competitive equilibrium allocations with open space are presented. The ‘fiscal profitability principle’ suggested by Margolis is confirmed to be applicable to determine an efficient distribution of open space. Many interesting results are established. For example, if utility function is Cobb-Douglas or log-linear, then rich will locate farther away from poor, irrespective of the distribution of open space; the optimal density distribution of open space is uniform if the spillover effects of open space are neglected, and it is decreasing with the distance from the CBD when the spillover effects of open space are taken into account.