URBAN AGGLOMERATION AND DISPERSION Alonsos Urban Agglomeration (Centralization) theory drew my attention in the lecture that is why;

I searched on this particular subject. I could not be able to find Alonsos article about that subject but, I found Takatoshi Tabuchis Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman. In the article, Tabuchi mentioned both Alonsos and Krugmans theories and he combined both theories and added his own knowledge to find a better solution and understanding. Below, I summarized the article. After the Industrial Revolution, immigration had started to the large cities from rural areas until 1970s. After that time, agglomeration lost its power and dispersion had taken its place due to decrease of transportation costs over time (1). The article considers product variety and agglomeration diseconomies like congestions while analyzing urban agglomeration economies in a two city system framework. Analysis was done by taking transportation cost as a variable. The result was when the transportation costs are high and low dispersion takes place, agglomeration occurs at intermediate levels (1). When the transportation costs are low, benefits of urban agglomeration vanishes and dispersion occurs because, the location of production and consumption of goods loose importance. This is because, access to the consumers and firms are cheap. The only concern is the location decision for housing. In this case dispersion is better (1). At intermediate transportation cost, manufacturing firms and workers migrate to one region. The cost was enough for firms to export manufacturing goods. However, the land costs are higher. At this cost, the utility level increases according to the results (1). When the transportation costs are high, firms disperse in each region to meet the demand. In a small city, imported goods cost and taxes become high. The reverse happens in large city. Since there are some inequalities between two cities, there will be a migration to the other city and two city sizes will be equal (1). To sum up, Urban Agglomeration and Dispersion is discussed in that article. Tabuchi found that the welfare level in the dispersed state is usually lower than that in the agglomerated state and that agglomeration policies should be made in the developing stages (1). APPENDIX (1) Tabuchi, T. (1998). Urban Agglomeration and Dispersion: A Synthesisof Alonso and Krugman. Journal of Urban Economics. Volume 44, p.333-351

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