OPTIMAL CITY SIZE IN A SPATIAL ECONOMY

Almost all previous theories of optimal city population size have suffered from two serious defects; they have been non-spatial in nature, and have not been embedded in a utility-maximizing framework. In this paper a spatial theory of optimal city size is developed which builds on recent work in residential location theory. Attention is focused on one of the necessary conditions for optimal city size, which specifies a relationship between economic aggregates in the city. In one case the optimal population rule is that expenditure on a Samuelsonian public good equal differential land rents. The minimum government intervention necessary to lead an otherwise competitive economy to the optimum is also discussed. © 1979.