Vanderbilt University

Audience

Why do cities grow, how do they change, what is the role of government? We will use the tools of welfare economics to explore how cities affect consumer welfare. Intermediate microeconomics is a prerequisite for this course. We will use equilibrium analysis to describe the location decisions of households and firms, and to understand the fiscal choices facing local governments.

This is a seminar for upper level students of economics and public policy. Students will be expected to read ahead, speak engagingly in class, write concise essays, assume an active role in shaping their course, and support each other’s efforts to understand the issues.

Because most of us live in urban settings, the issues in this course are of considerable current interest. Students will be expected to read a good newspaper (e. g. Wall Street Journal) and, in class and in essays, relate the economic theories to the current public discussion of housing, commuter transportation, schools, crime, and property taxes.

Books
Arthur O’Sullivan, Urban Economics, 5th edition, (Irwin, Chicago 2003) provides clear discussion of the concepts in the context of the US scene.
Barbara Ehrenreich, Nickel and Dimed (Henry Holt, New York, 2001) paper, optional purchase. Please read one of the three sections of N&D with chapter 14 of the text on poverty.

Students will find additional sources helpful in the completion of projects. The Index produced by the Public Affairs Information Service (PAIS International) and EconLit may point to useful materials. The GPO Monthly Catalog of the Government Printing Office points to Government Documents, the Heard Library provides three versions. Newspaper Abstracts is part of ProQuest Direct that provides an index to articles in newspapers. Congressional Universe provides information about legislation. These databases are available by network at the Heard Library’s website, www.library.vanderbilt.edu. Librarians can help you learn to use these tools.

Projects
There will be four projects, each associated with a particular section of the course. The projects are described below. Members of the class are encouraged to discuss their projects with the instructor and with each other as the projects develop. They may submit draft projects for comment two class meetings before the project is due. Projects submitted late

Formal Requirements

The distribution of grades in the course will reflect the quality of individual work. Numeric grades will be used until the end of the course. Imagination, originality, and knowledge of the current public debate of the issues matter. Students will be assigned to two person teams.

Presentation

Each student in the class will have an opportunity to present one of his or her projects to the class. Each presentation will be from five to ten minutes. It will be graded pass/fail. The room has a computer projection system and so students are encouraged to use PowerPoint. For an introduction to PowerPoint see a website for ES 130 (http://wwwfp.vuse.vanderbilt.edu:8888/es130/lectures/lecture3b/introppt.htm).

PowerPoint is MicroSoft Office software for making presentations.

Here are some further notes on using PowerPoint and making presentations.

1) Let the slides be an outline, a point of reference. Do not put everything you want to say on the slides. Five slides may suffice for a five-minute talk; three may be even better.
2) Use no font smaller than 14 points. Five lines of text is usually a maximum.
3) Use color sparingly.
4) Simple slide designs dominates complex designs.
5) Stand up straight with both feet on the floor, face forward, smile, make eye contact with your audience, do not wear a hat.
6) Include a title at the beginning and draw a conclusion at the end. Make clear the punch line of your talk.
7) Explain why you find the topic interesting. Your enthusiasm is important.

Honor Code

The honor code applies to this course. Each student is to perform his or her own work and accurately cite all source materials used in class and projects. Members of the class should work together, read drafts of each other's projects, and share ideas.

About the Instructor

I am Malcolm Getz. I have taught urban economics at Vanderbilt since 1973. I earned a BA in economics at Williams College in 1967 and a Ph.D. at Yale in 1973. My dissertation concerned Atlanta's transit system. I wrote a book about urban fire departments and another about public libraries. My book, Veterinary Medicine in Economic Transition, appeared in 1997 (Iowa State University Press.) From 1985 to 1994, I was Associate Provost. I am Director of Undergraduate Studies in Economics.

Once or twice during the semester I may miss a class due to participation in a conference or to meet other professional obligations.

My office is Calhoun 406, call 322-3425. I am available in my office from 9:00 to 10:00 AM MTWR and by appointment. My e-mail address is Malcolm.Getz@Vanderbilt.edu. My home telephone is 356-5601, please call before 10 PM or after 6:30 AM. Web to http://www.vanderbilt.edu/Econ/faculty/Getz/MGetz.html.

Sites on the World Wide Web

Here are web sites that may provide information useful in the completion of the projects.

University of Virginia, data on regions, states, and metropolitan areas:

http://www.lib.virginia.edu/reference/general/stats.html

Bureau of the Census

http://www.census.gov

County Business Patterns (national figures only) http://fisher.lib.virginia.edu/cbp

http://www.census.gov/epcd/cbp/view/cbpview.html

Bureau of Labor Statistics

http://stats.bls.gov/

Bureau of Transportation Statistics

www.bts.gov

Bureau of Justice Statistics

http://www.ojp.usdoj.gov/bjs/

National Archive of Criminal Justice Data

http://www.icpsr.umich.edu/NACJD/home.html

National Center for Education Statistics

http://nces.ed.gov/

Department of Housing and Urban Development

www.hud.gov

American Public Works Association, trade group

http://www.pubworks.org/

Schedule

Go to prometheus.vanderbilt.edu

Four Projects

Project One: to be completed as a team, Pick one topic.

( a) Urban Growth: Write an essay as a briefing paper for a mayor. Pick one of the 100 largest metropolitan areas in North America. How did the area reach its current size and what are its prospects for the decade ahead? What policies should the major advocate with regard to growth?

Teams of two students are to prepare the report, each team writes about a different metropolitan area. The report should give a brief history of the city, indicating why it came to be located where it is, the era of and an explanation for its most rapid growth, and a characterization of the pace of growth since 1980. The report should include a diagram reporting the change in population over time. It should describe the economic base (the part of the local economy that exports outside the local area). How large are the government, service, and manufacturing sectors? How cyclical is employment? How much unemployment? How much poverty? Explain the growth path for the metropolitan area relative to the national average. If possible, include a diagram or two.

( b) Industrial Location Your mayor is interested in the location and growth pattern of an industry important to the city. Write an essay for the mayor analyzing changing location patterns in an industry of your choice. Using County Business Patterns, the Census of Manufacturing, and industry trade groups data from say the 1960s to the most recently available year, compare employment or output by state in the industry. Explain why the industry was located as it was in the 1960s, and explain why the location pattern has changed.

Examples of industries include steel, aluminum, automobiles, electronics, and furniture among durable goods, and beer, meat packing, and other food, pulp & paper, printing, apparel, and petroleum among non-durables. Essays might also address the location of banks, and other financial industries, and advertising or other business services. Look for stories in major newspapers as well as for books and articles in periodicals. What is the implication of the changing pattern of industrial location for cities? Teams of two students may complete the Alternate Project.

Project Two, individual project, Pick one topic.

( a) Land Use & Rents, The Mayor is interested in the location decisions made by firms within the metropolitan area. Choose a retail activity and write an essay describing its location pattern within a metropolitan area. Use the Yellow Pages or other guide to locate the establishments. Why does the industry show the location pattern that it does? How has the location pattern changed over time and why has the change occurred?

( b) Development Subsidies: Many mayors devote tax dollars to subsidizing business who locate new plants in their cities, just as Nashville committed $200M tax dollars to the Titans and $50M to Dell. Critics refer to these deals as corporate welfare. Write an essay for the mayor describing the policies cities pursue to attract business. Do the policies work? Who benefits and who loses from such policies? Should the Congress enact a law limiting the ability of state and local government to subsidize businesses that relocate?

Project Three. team project, Pick one topic.

( a) Schools The number one issue in political campaigns from local school boards to the presidency has been K12 education. Your goal is the write an insightful essay on education policy for your mayor. Here are three key issues. Your essay might address all three, focus on one, or choose another dimension of the issue.

i) How do we measure the performance of a school? How might the school board, mayor, and council recognize success?

ii) How do we finance the schools? Should schools be financed locally with property taxes and local sales taxes or should the be financed by state government? What role should the Federal government play in finance?

iii) What role should the private sector play? What is the evidence on vouchers, charter schools, and contractor-operated schools?

( b) Crime Over the last twenty years, the nation has devoted substantially more resources to police, courts, and prisons. Crime rates have fallen. A substantially higher proportion of American are in prison than found in any other country. Write an essay for your governor assessing policies in criminal justice. Here are some possibilities.
i) Do punishments fit the crime? Should they? If they don’t , what would be the pros and cons of moving to a policy of “let the punishment fit the crime”?
ii) Mothers Against Drunk Driving have sought to criminalize consumption of alcoholic beverages. An alternative strategy might be to increase taxes on alcohol. What are the costs and benefits of criminal penalties versus taxes?
iii) The War on Drugs criminalized possession and consumption of mood altering substances other than alcohol. What are the costs and benefits of regulating and taxing drugs rather than criminalizing them? There is a referendum on the ballot in Nevada this November. The Justice Minister is Canada, Maurice Cauchon, has proposed fines instead of prison for minor infractions. Great Britian has already taken such steps.

( c) Traffic As urban areas grow, the volume of traffice and level of congestion increases. One-way commuting times of over an hour are now common in many large cities. Write an essay evaluating the costs and benefits of various strategies for addressing congestion. Possilbe topics include electronic tolls, paratransit, and railroads as well as building more highways.

Project Four, individual project, Pick one topic.

( a) Poverty Among Children Your governor wants to be briefed on poverty among children in your state. (Pick any state you like.) What does it mean to be poor? What are the causes of poverty? What are the principle public policies that assist poor children? What should be the goal of such policies? What have been the consequences of the changes in national state policies over the last decade? What are the pros and cons of policies currently being considered?

( b) Housing Your mayor advocates “decent, safe, affordable housing” for all by the end of the decade. Write an essay evaluating existing housing policies and evaluating alternate policies the mayor might propose to meet the stated goal. Thinking carefully about the goals, the nature of market failures, and the changing fundamental locations patterns in the city.

( c) Property Taxes The project may investigate one of the principal sources of revenue of local government, including the property tax, local sales tax, lottery, wheel tax, income tax, and state and federal grants to local governments. Consider the equity and efficiency consequences of the revenue source, its income elasticity and so its cyclical character. If the local government needs more revenue, is the revenue source you are analyzing a good choice? This project could explore Tennessee’s fiscal problems or state lotteries.