Studies in Operational Regional Science – serie

A wide range of books on urban systems models are available today for the student of urban planning, geography, and economics. There are few, if any, books, however, that deal with integrated urban systems modeling from the operational viewpoint. The term "integrated" is used here in the same sense as the "general equilibrium", in contrast to such approaches as "sequential" or "partial equilibrium". In fact, the main thesis of this book is that the characteristics of ur­ ban activity that best distinguish it from rural activity are (1) the intensive use of urban land and (2) urban congestion. On this basis, models that are introduced in this book are three- dimensional in character and produce urban land use configurations with explicit optimal density of urban pro­ duction activities along with optimal levels of transportation congestion. It is also assumed that both public and private sectors play significant roles in shaping urban forms, structures, and functions in mixed economic systems. From this viewpoint, models developed in this book address two integrated decision-making procedures: one by the public sector, which provides urban infrastructure and public services, and the other one by the private sector, which uses provided infrastructure and public services in pursuing parochial interests.

It is generally agreed that food, clothing and shelter are the three basic material needs of all people. A simple test for the successfulness of any economic system may therefore be the extent to which it succeeds in providing the population with these commodities. One would conjecture that in the countries that are generally considered as highly developed there would be no problems at all with their availability. And although this conjecture is to a large extent, confirmed by the evidence, it is nevertheless surprising that in western economies with the high per capita incomes housing is still an important object for public concern. Food and clothing are abundantly available in these countries, but the provision of housing is often an object of serious policy concern. To mention one striking example : in the Netherlands there still exist official figures that mention housing shortages of ten thousends of dwellings. This state of affairs is not mentioned here to motivate an exaggerated view on housing problems in Western countries. The situation in the Netherlands and comparable countries is indeed much better than that in underdeveloped countries and a comparison with developing countries would presumably show figures which are comparable to those for food or clothing. The point I want to make is that even in highly developed market economies where the availability of food and clothing is quite satisfactory, the availability of dwellings often is not.

Since the beginning of the economic crisis of the 1980s considerable research has been dedicated to the study of the unemployment problem. Nevertheless, the phenomenon has not become fully understood, nor are its consequences adequately prevented. In this volume, economists and social scientists are brought together to offer the reader the latest insights on unemployment and policies regarding unemployment from the perspectives of both disciplines. The book is divided into four main sections. Part One provides an introductory chapter and general overview. Part Two contains contributions that provide new insights from an economic science perspective, while Part Three offers a view from social scientists. The final section is devoted to the examinations of policy issues concerning unemployment.

Impact analysis of economic policy is a subject which is gaining in­ creasing interest in both theoretical and applied economic research. Two main reasons for the growing interest can be distinguished. First, the situation of the government's finances is making it more than ever necessary to assess critically the effects of the instruments used to pursue public policy goals. Secondly, because of the economic stagnation government will be increasingly appealed to for support. Impact analysis, however, is hampered by three major problems: methodological deficiencies, lack of econometric approaches which have been adapted to the specific conditions of this kind of analysis and data availability. The present book deals with these problems in the context of regional economic policy. However, the main findings are broadly applicable in various other fields. This book is primarily oriented towards those who have a practical interest. Therefore, attention is mostly paid to the practical aspects of the methodology and the measurements methods. Furthermore, the methodologi­ cal and econometric parts are supplemented by two extensive case studies. ~- Three people have contributed constructive criticisms and suggestions on some chapters of the book: Peter Nijkamp, Theo Dijkstra and Manfred Fischer. I am very grateful for their support. They, of course, share no blame for any deficiences in the present form of the book. I also gratefully acknowledge the assistance of Harry Barkema and Marja Schuring with the computations.

This monograph is about the multi regional input-output model used in long-run simulation. The input-output technique was originally developed for spaceless, short-term analysis of a national economy. However, its high potential as an analytical tool has resulted in an expansion of its application in various directions. Thus, we now have the inter- and mul tiregional input-output model, in which a nation is broken down into a number of interacting regions, and some applications dealing with long-range projections of input-output systems. This study attempts to integrate those two directions within the framework of interregional simulation modeling. A major problem with the multiregional input-output model for long-run simulation is how to update the technical and trade coefficients in the model. This study focuses on the trade coefficient updating problem, and a solution is presented in which a trade coefficient model is coupled with the price model built into the input-output system. When I began this project, the main problem facing me was not purely theoretical but a very practical one: how to design an interregional model for Indonesia. Indonesia is a country characterized by its quite uneven population distribution over the archipelago. My interest was in the formation of its settlement policy, and the use of modeling to assist in this process. This original intention may be evident in various parts of the text.

Spatial econometrics deals with spatial dependence and spatial heterogeneity, critical aspects of the data used by regional scientists. These characteristics may cause standard econometric techniques to become inappropriate. In this book, I combine several recent research results to construct a comprehensive approach to the incorporation of spatial effects in econometrics. My primary focus is to demonstrate how these spatial effects can be considered as special cases of general frameworks in standard econometrics, and to outline how they necessitate a separate set of methods and techniques, encompassed within the field of spatial econometrics. My viewpoint differs from that taken in the discussion of spatial autocorrelation in spatial statistics - e.g., most recently by Cliff and Ord (1981) and Upton and Fingleton (1985) - in that I am mostly concerned with the relevance of spatial effects on model specification, estimation and other inference, in what I caIl a model-driven approach, as opposed to a data-driven approach in spatial statistics. I attempt to combine a rigorous econometric perspective with a comprehensive treatment of methodological issues in spatial analysis.

Since the beginning of the economic crisis of the 1980s considerable research has been dedicated to the study of the unemployment problem. Nevertheless, the phenomenon has not become fully understood, nor are its consequences adequately prevented. In this important new volume, On the Mysteries of Unemployment, economists and social scientists come together to offer the reader the latest insights on unemployment and policies regarding unemployment from the perspectives of both disciplines. On the Mysteries of Unemployment contains four main sections. Part One provides an introductory chapter and general overview. Part Two contains rich contributions that provide new insights from an economic science perspective, while Part Three offers a balanced view from social scientists. The final section is devoted to the examination of policy issues concerning unemployment. This volume, unique in its field, will be of interest to researchers, students, politicians and policy-makers.

Spatial econometrics deals with spatial dependence and spatial heterogeneity, critical aspects of the data used by regional scientists. These characteristics may cause standard econometric techniques to become inappropriate. In this book, I combine several recent research results to construct a comprehensive approach to the incorporation of spatial effects in econometrics. My primary focus is to demonstrate how these spatial effects can be considered as special cases of general frameworks in standard econometrics, and to outline how they necessitate a separate set of methods and techniques, encompassed within the field of spatial econometrics. My viewpoint differs from that taken in the discussion of spatial autocorrelation in spatial statistics - e.g., most recently by Cliff and Ord (1981) and Upton and Fingleton (1985) - in that I am mostly concerned with the relevance of spatial effects on model specification, estimation and other inference, in what I caIl a model-driven approach, as opposed to a data-driven approach in spatial statistics. I attempt to combine a rigorous econometric perspective with a comprehensive treatment of methodological issues in spatial analysis.

With the ever increasing number of opportunities, in every aspect of modem life, making choices becomes part of our daily routine. It is thus only natural that social scientists have started to study human choice behavior. Early efforts focused on modeling aggregate choice patterns of home buyers, shoppers, travelers, and others. Later studies, aiming to achieve more realistic results, have concentrated on simula­ ting disaggregate behavior. The most recent approach in choice research is the so-called Discrete Choice Modeling. It is a front-line area mainly in contemporary transportation, geography, and behavioral research. It focuses on individuals' decision-making processes regarding the choice of destinations, modes, departure times, and routes. Considerable research has been done on identifying and quantify­ ing the general rules governing the individuals' choice behavior, but to the best of our knowledge there is no single book that solely deals with route choice. The study of travelers' route choice in networks is primarily oriented towards gaining insight into their spatial choice behavior. How do people choose routes in a network, what do they know, what do they look for, which road characteristics playa role? On the basis of this information it is possible to design quantitative models aimed at predicting the use of routes dependent on the characteristics of the routes, those of the surrounding environment, and those of the travelers. In this way, traffic flows in the network can be calculated and the network performance can be evaluated.

Choice processes appear in all spheres of society. Hitherto ruling paradigms in the modelling of choice problems have presumed a competitive general equi- librium which, however, proves insufficient for dynamic processes. This contribution aims at providing a general coherent and closed frame- work for the dynamic modelling of decision processes. It was one of my main interests to build a bridge between the pure model building concepts and their practical applications. Therefore all given examples are related to empirical work. Solution algorithms for the estimation of trend parameters as well as the numerical simulation in concrete applications therefore playa central role in this contribution. Friendly relations with a number of colleagues from many universities in Europe, and the U.S. have emerged during the different applications. I wish to thank all of them. The international cooperations were mainly initiated and supported by conferences and workshops organized and financed by the International Institute for Applied Systems Analysis (lIASA), the Istituto Ricerche Economico-Sociali Del Piemonte (I RES). the Institut National D 'Etudes De'mographiques (I NED), the Centre for Regional Science Research UmeJ.(CERUM) and the Projets de Cooperation et D'Echange avec France (Procop>' Special thanks go to the Volkswagen Stiftung for financial support of this work over the years. Thanks also go in particular to my friend and mentor Prof.W.Weidlich for his encouragement and for the many suggestions he made in fruitful discus- sions and common work that have taken place over the years.

A wide range of books on urban systems models are available today for the student of urban planning, geography, and economics. There are few, if any, books, however, that deal with integrated urban systems modeling from the operational viewpoint. The term "integrated" is used here in the same sense as the "general equilibrium", in contrast to such approaches as "sequential" or "partial equilibrium". In fact, the main thesis of this book is that the characteristics of ur­ ban activity that best distinguish it from rural activity are (1) the intensive use of urban land and (2) urban congestion. On this basis, models that are introduced in this book are three- dimensional in character and produce urban land use configurations with explicit optimal density of urban pro­ duction activities along with optimal levels of transportation congestion. It is also assumed that both public and private sectors play significant roles in shaping urban forms, structures, and functions in mixed economic systems. From this viewpoint, models developed in this book address two integrated decision-making procedures: one by the public sector, which provides urban infrastructure and public services, and the other one by the private sector, which uses provided infrastructure and public services in pursuing parochial interests.

It is generally agreed that food, clothing and shelter are the three basic material needs of all people. A simple test for the successfulness of any economic system may therefore be the extent to which it succeeds in providing the population with these commodities. One would conjecture that in the countries that are generally considered as highly developed there would be no problems at all with their availability. And although this conjecture is to a large extent, confirmed by the evidence, it is nevertheless surprising that in western economies with the high per capita incomes housing is still an important object for public concern. Food and clothing are abundantly available in these countries, but the provision of housing is often an object of serious policy concern. To mention one striking example : in the Netherlands there still exist official figures that mention housing shortages of ten thousends of dwellings. This state of affairs is not mentioned here to motivate an exaggerated view on housing problems in Western countries. The situation in the Netherlands and comparable countries is indeed much better than that in underdeveloped countries and a comparison with developing countries would presumably show figures which are comparable to those for food or clothing. The point I want to make is that even in highly developed market economies where the availability of food and clothing is quite satisfactory, the availability of dwellings often is not.

This monograph is about the multi regional input-output model used in long-run simulation. The input-output technique was originally developed for spaceless, short-term analysis of a national economy. However, its high potential as an analytical tool has resulted in an expansion of its application in various directions. Thus, we now have the inter- and mul tiregional input-output model, in which a nation is broken down into a number of interacting regions, and some applications dealing with long-range projections of input-output systems. This study attempts to integrate those two directions within the framework of interregional simulation modeling. A major problem with the multiregional input-output model for long-run simulation is how to update the technical and trade coefficients in the model. This study focuses on the trade coefficient updating problem, and a solution is presented in which a trade coefficient model is coupled with the price model built into the input-output system. When I began this project, the main problem facing me was not purely theoretical but a very practical one: how to design an interregional model for Indonesia. Indonesia is a country characterized by its quite uneven population distribution over the archipelago. My interest was in the formation of its settlement policy, and the use of modeling to assist in this process. This original intention may be evident in various parts of the text.

In the mid 1980's - while a student at the department of econometrics at the Free University - I became an assistant at the Institute for Environmental Studies (IvM) of this university. My main task was assisting with the com- putational aspects of the project 'an integrated environmental model: a case study in the Markiezaat area'. A number of methodological problems were for- mulated during the operationalization phase of that project, such as the need to develop systematically an integrated model design and to look for means of handling different sources of information. Prof. Dr. P. Nijkamp of the Department of Regional Economics and Drs. L. Hordijk - at that time leader of the economic-technological research group at the IvM - therefore initiated a project proposal to be supported by the Netherlands Organisation for the Advancement of Pure Research (ZWO). Meanwhile I became an assistant to Prof. Dr. P. Nijkamp, surveying qualita- ti ve statistical developments in the field of regional inequa li ty analysis. This inventory has been shown to be a relevant basis for the preparation of this book.In spring 1982 I began working at IvM on the above project on integrated environmental modelling.