An Agent Based Model of a Thinly Traded Land Market in an Urbanizing Region

Abstract

: We have developed a model of a multi-period agent-based land market based on the theory of thinly traded land markets. This new model builds upon the stylized fact that land demand (supply) decreases (in-creases) across the urban-rural gradient. The effect of heterogeneous amenities are also included in the model. We simulated the model for a growing urbanizing region and investigated the evolution of land development patterns. We found that this simple model can replicate/reproduce many interesting observed features. For instance, scattered development can emerge in transitory periods due to the land demand (supply) decreases (increases) over the urban-rural gradient. Furthermore, increases in transportation costs and the number of in-migrants tend to decrease both the intensity and persistence of scattered development. area, but that it disappears as the region becomes more populated and competition for land increases. The simulation results show that the intensity and persistence of scattered development are systematically related to key economic factors of the model, like market competition condition, transportation costs, migration rate.