Working Paper Series, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin), Royal Institute of Technology
City re-location and potential wealth loss - A method of measurement and an empirical test
Abstract: While physical city re-location is relatively uncommon,
the economic center of a city might shift over time, sometimes over a short
period of time. Commonly this happens when large retail centers are
constructed in proximity to the city. It can also be the case that cities
subject to frequent natural disasters choose to re-locate to “safer” areas.
Regardless of the reason, this paper argues that the property market will
see both winners and losers in terms of changes in distance to the city
center. The aim of this paper is to develop a measure allowing for
quantification of the gains and losses of such a re-location, these will
help determine if the re-location is Kaldor-Hicks efficient. Further, the
usefulness of this measure will be illustrated using Kiruna as an example.
Kiruna is threatened by ground movements due to the mining industry and a
decision has been made to re-locate. The empirical results suggest that for
the particular case of Kiruna, the re-location will result in aggregate
gains larger than aggregate losses.
Keywords: City re-location; urban economics; wealth redistribution; city planning; (follow links to similar papers)
JEL-Codes: O21; R11; R13; R31; (follow links to similar papers)
21 pages, March 15, 2013
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- This paper is forthcoming as:
Kopsch, Fredrik, 'City re-location and potential wealth loss - A method of measurement and an empirical test', European Planning Studies.
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