The urban land market: A computable equilibrium model applied to Kampala City
A quantitative model of internal city structure to determine the causes and costs of the misallocation of land in a developing country city
Abstract
This paper analyses a quantitative model of internal city structure to determine the causes and costs of the misallocation of land in a developing country city. Using a Spatial Computable General Equilibrium Model, the authors developed a simulated version of a city with firms and households choosing their location decisions in a framework with transport costs for both goods and the commuting of people across the urban space. The model is then used as a benchmark for comparison with evidence from Kampala (Uganda). Productivity and amenity parameters that vary across the city capture the deviations from the benchmark model, and can then be explained using citywide variation in land tenure systems.
The land tenure system in Kampala explains much of the variation in productivity and density across space. The evidence suggests that leasehold land is particularly productive, leading to higher economic activity in certain areas of the city across all sectors. In comparison, customary land and Mailo land – a land tenure system that came into effect when the kingdom of Buganda signed an agreement with the British-administered Uganda Protectorate there in 1900 – reduce economic activity while increasing residential densities, with the former particularly leading to high density low-income neighborhoods. The results also reveal significant impacts of wetlands and other protected lands, and of the presence of government services, on both residential and firm locations.
Citation
Louise Bernard, Julia Bird, Anthony J. Venables (2016) The urban land market: A computable equilibrium model applied to Kampala City
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The urban land market: A computable equilibrium model applied to Kampala City