1. Central Cities and Regional Market Analysis
Lecture 2
Central Cities and Regional Market Analysis

3. Cities, Counties, Metropolitan Areas
County
Metropolitan Area $$
Central Business District
Central City
Smaller Cities

4. Atlanta Metropolitan Area

5. Metropolitan Statistical Area (MSA)
Formed by the U.S. Bureau of the Census
Basis for creating a combination of contiguous counties based on two principles:
Functional Integrity Principle (economic links between counties)
Homogeneity Principle (similarities between counties)

6. Metropolitan Statistical Area (MSA)
Nassau
County
Duval
County
Baker
County
St. Johns
County
Clay
County

7. Core of a City
Dense collection of inhabitants of relatively large population
Where none of the citizens make their living directly from agricultural activity
Self-Supporting Workforce
Where social and economic relationships are relatively complex and hierarchical
Formal Government Structures

8. Causes of City Formation
Economies of Scale
Produce more goods in fewer facilities
Economies of Agglomeration
Location Synergy
Positive Locational Externalities
Co-existence of different industries
Need for “Break-Bulk” Points and Distribution Centers in Goods Transportation

9. City Growth: Atlanta Key railroad junction
Close to Washington, D.C. by rail
Higher-level state and federal governmental and financial service functions in Atlanta (due in part by existing rail)
Delta Airlines established HUB in 1930’s
Cultural and Social Factors, breeding entrepreneurial talent and relatively successful race relations

10. Evolution of Top 10 Ranking Cities
1850 Top 10 Cities
2000 Rank
2000 Top 10 Cities
New York
1st
Baltimore
16th
Los Angeles
Boston
20th
Chicago
Philadelphia
5th
Washington-Baltimore
New Orleans
31st
San Francisco - Oakland - San Jose
Cincinnati
24th
St. Louis
50th
Pittsburgh
49th
Detroit
Louisville
64th
Dallas
Buffalo
56th
Houston

11. Additional Movement Patterns
Overcrowding and High Costs of Living
Los Angeles to Phoenix
Weather and Climate
Movement to Arizona and Florida
Technological Development
New Industry to open
Boston, San Francisco, Raleigh-Durham
Cheaper Transportation / Entertainment
Las Vegas, Orlando

12. Top 10 Cities of Growth (1950 – 1998)
City
Percent Growth
Average Growth Per Year
Phoenix
1251%
26%
Miami - Ft. Lauderdale
697%
15%
Tampa - St. Pete
668%
14%
Atlanta
638%
13%
San Diego
542%
11%
Dallas - Ft Worth
462%
10%
Houston
461%
Denver - Bolder
374% 8%
Seattle - Tacoma
334% 7%
Portland - Salem
319%

13. The Internet and Growth Implications for the Future
Lecture 2
The Internet and Growth Implications for the Future

14. Industrialization Period
Strong correlation between specialized services in the manufacturing of goods and large employment inputs
Implies population growth
Laborers and skilled workers migrate to areas where work opportunities are better and/or available

15. Information Age
Transportation and distribution costs often inconsequential
Producers may not require hierarchy of linkages to cities of smaller sizes for efficient production and distribution of goods and services.
“Shop” can be set up in small towns

16. Future of Internet and Growth
Lower communication costs will allow second- and third-tier cities to grow faster than larger cities
Cities with good climate and overall quality of life will grow faster than those with few local amenities.
City location and growth will certainly be determined more by access to environmental and cultural amenities, and less by purely physical or geographical “centrality”
Population densities should decline as people lose the need to live close to work
Mixed-Use Communities away from CBD

17. Economic Base Analysis
Lecture 2
Economic Base Analysis

18. Economic Base
Sources of a region’s total income (income of all households in the region)
Income from current employment
Salary, bonuses, commissions
Self-employment business income
Income from accumulated wealth or pensions
Portfolio returns from investments
Pension fund payments of annuities
Transfer payments from Government
Social Security
Welfare, housing, food, medical support

19. Economic Base Analysis
Export Sector: Employment bringing revenues into a region (i.e.: manufacturers of any product that serves more than the local population and brings revenues into the local region from outside)
--Location Quotient (LQ)
Service Sector: Employment geared toward serving the local population

20. Circular Flow of Income Model
“Real Flows:” Movement of Productive Services
Consumer Goods and Services
HOUSEHOLDS
BUSINESSES
Productive Resources
(labor, land, capital, entrepreneurship)

21. Circular Flow of Income Model
“Money Flows:” Movement of Cash
Consumption Expenditures
HOUSEHOLDS
BUSINESSES
Resource Payments
(wages, rents, dividends, interest, profit)

22. Economic Base of the Local Economy
Economic Base Theory:
Identification Variables for Household Sector
Size of population, number of families, number of households
Age composition of the population
Income composition of population
Size of families and households
Occupational composition of population
Gender composition of population
Marital status of population
Educational attainment level of population

23. Economic Base of the Local Economy
Economic Base Theory:
Identification Variables for Business Sector
Standard Industrial Classification (SIC) System (U.S. Census Bureau): Identifies industrial activities according to numerical code
Allows comparisons between economies (by MSA, city, or county)

24. Economic Base of the Local Economy (SIC)
Agriculture
Mining
Construction
Manufacturing
Transportation, Communications, Utilities
Wholesale Trade
Retail Trade
Finance, Insurance, and Real Estate (FIRE)
Services (personal, business)
Services (professional, educational)
Public Administration (federal, state, local government agencies)
Nonclassifiable Establishments

25. Export Base Analysis How Would Economic Growth Affect the
Following Sectors of a Local Economy?
Residential Housing Market
Residential and Commercial Construction Industry
Purchasing Power of Consumers
Retail Real Estate and Industry
Employment

26. Local Investment Providing Growth
Reinvestment from earnings or borrowed funds allows firms to grow faster, assuming wisely-utilized capital
Cities which are home to high-growth firms with high retained earnings and significant expansion plans will see growth

27. Government Incentives for Growth
Local governmental acquisition of large sites for future development
Providing physical infrastructure
Tax abatement, credits, or breaks
Government financing
Creating Foreign Trade Zones with tax-exempt status on exports