A critique of urban economics

A critique of urban economics

by Michael Ball

The objective of urban economics is to develop an economic theory of cities. I t assumes that cities have general economic functions and that there are common linkages between those functions (a common explanation can be provided, for example, of households’ residential location once their workplace location is known). Urban economics attempts to show what those functions are, and how they interrelate. Empirical analysis is important for this task because it helps to test the validity of theories and generate working hypotheses that theory can try to explain. A particular relationship between facts and theory consequently forms a basis for urban economics.

The possibility that such an identifiable economic theory of cities can exist will be questioned here. Without it, however, urban economics collapses as a form of analysis. So what is being criticized is the objectives and methods of urban economics. The critique will be centred on issues concerning the implict epistemology of urban economics, the internal consistency of its theories, and on the fact that its analysis must inevitably be one-sided and invariably supportive of the status quo. The critique is, therefore, only a partial one for it does not present a detailed exposition of what would be an adequate way of understanding the economic activities which take place in urban areas. Such an approach to a critique, whilst possibly more convincing, requires a lengthy exposition far beyond the bounds of a single paper (and probably of current knowledge).

The theoretical validity of the concept ‘urban’ has been criticized before, notably by Castells (cf. Castells, 1977). But most of those critiques have been centred upon the concern of bourgeois sociology to find an urban culture/ideology, or an urban organizational structure. This type of critique does not encompass all of the issues raised by urban economics, although its relevance is considerable. In order to highlight those particular issues, some of the ground covered by earlier critiques must be briefly considered, albeit from a different angle. The way in which urban economics, as opposed to urban sociology, defines its subject matter must be examined, even if the similar conclusion is reached that ‘urban’ cannot represent a theoretical object.

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The absence of a detailed critique of urban economics within the radical/marxist literature has led to the unfortunate situation where socio- logical questions about urban areas have often simply been replaced by economic ones. Terminological differences apart, the questions asked often bear a remarkable similarity to those of urban economics. In particular, they assume that urban areas have general economic functions, which can be analysed a t the urban level alone, once certain external parameters have been taken into account. Under the guise ofpolitical economy, the concept ‘urban’ has been resurrected as an appropriate object of study. The new requirement is that justification is based, a t least initially, upon the analysis of an economic function: say, for example, the reproduction of labour- power (Castells), or the functions which it is often claimed produce a (factually untrue) universal and endemic fiscal crisis of cities (cf. the debate in volume I of this journal).

Even though these new analyses do not necessarily adopt the methods of urban economics, their existence does bring to the fore the question ofhow to analyse economic forces a t a spatial level. I t will be suggested below that the methods of urban economics are not the way.

I What is urban economics?

The issues studied by urban economics might seem self-evident; urban areas exist and many economic activities take place within them. Not all of those activities are, however, potential topics for urban economics. For them to be so, criteria are required which make the ‘urban’ characteristic important.

Examination of the literature in order to find the criteria defining the urban dimension produces an answer which is only apparent because of an absence of anything else: urban-ness is defined by its obviousness. Specific subjects are treated as the domain of urban economics yet the reasons why are never given. Far from being obvious the definition of urban economics is, in fact, distinctly unclear. The few attempts that have been made to define it are either logically inconsistent or lead to untenable epistemological positions.

Urban economics is concerned with developing the understanding of those economic phenomena it defines as urban. In order to do this two initial conditions are required: i) a classification of concrete objects must be made such that certain facts can be delimited as ‘urban’; ii) a theory has to be developed which shows that these ‘urban facts’ have direct causal linkages with each other; thereby, enabling urban economies to be constituted as theoretical objects. This second aspect could simply be the application of pre-given theoretical constructs to the urban subject matter. Urban economics transposes the concepts of neoclassical economics to its vision of the

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urban economy.’ Neoclassical economics is, of course, well suited to the task as it claims to be applicable to any type of economy. Urban economics and neoclassical theory have become so closely interlinked that the former is generally regarded solely as a subdiscipline of the latter. In this context any other theory of the economics of urban areas inevitably becomes dubbed as radical, and therefore above reproach, even if it faces the same difficulties in defining its subject matter.

Justification of the need for an isolated analysis of urban economies on the above criteria does not imply that those economies are autonomous entities cut off from the rest of the world. Instead they can be, and are, treated as having many external linkages with other urban areas and with the national and international economic system (cf. Thompson, 1965; 1968). A degree of separability of urban phenomena is necessary, however, for a specific economic analysis of urban areas to be possible. This question of separability and the forms of analysis produced by such a separation will be a dominant theme of the arguments that follow.

Three definitions of urban economics

Finding an adequate definition of urban economics, let alone a detailed justification for that definition, is difficult. To be fair to the ones that will be considered, none would claim to be an exhaustive examination of the theoretical method of urban economics. All three are taken from well- known textbooks, by Edel and Rothenberg (1972), Hirsch (1973), and Mills (1972), and were meant as brief introductions. Their brevity and the lack of anything of greater depth is symptomatic, however, of the level of concern within the discipline for defining its own existence. All three suggest approaches to defining urban economics which are ostensibly different. O n closer examination, however, they all reduce to similar attempts to separate out of an urban economy from the wider ecomic structure.

A common position within urban economics is a sort of pragmatism: forget the theoretical niceties of defining the subject matter, just get on with the job. Formal labelling of the empirical material as ‘urban’ is essentially irrelevant, it is argued, to the task of understanding the concrete issues at hand. The tools of analysis already exist (those of neoclassical economics) and the data to be collected is known. The subject matter of

’ Neoclassical economics is being used here as a generic term for the body of theory which treats a capitalist economy as consisting of a set of interlinked markets which resolve the problem of a scarcity of resources in relation to individual wants by the operation of the mechanism of supply and demand, in the explanation of which the concepts of equilibrium and the margin play a predominant role. I t is a problematic that can accommodate considerable theoretical differences. These differences are, however, based on the relative merit of specific assumptions rather than on questioning the theoretical method itself. The different ‘schools of thought’ that exist within this problematic, including the variants of Keynesianism, will consequently not be isolated for the purposes of this discussion.

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urban economics is consequently decided upon by the researcher in an on-going, ad hoc way.

Mills, in his Urban economics, personifies this pragmatic approach. In response to the question ‘What is urban economics?’, Mills replies that ‘Urban economics is a speciality within economics in which economists use their tools of analysis to understand and evaluate urban economic phenomena’ (Introduction, p. l). Or, on reformulating this statement, it could read ‘urban economics is what urban economists do’.

The pragmatic urban economist does not operate, however, from a theoretically neutral position. Both the theoretical tools of analysis (those of neoclassical economics) and the theoretical presupposition of the existence of economic phenomena that can be labelled as urban have to be implicitly embodied in this particular definition. They will determine, for instance, what facts are isolated, how those facts are related to each other, and the type of explanations given. Before they start, pragmatists are therefore faced with the difficulty of categorizing their data. Any categorization necessitates the existence of concepts defining those categories; concepts which can only be the product of a particular theory. The theoretical issues involved in defining urban economics consequently do not disappear simply by avoiding them.

Hirsch (1973) goes beyond a simple pragmatic approach to suggest one based upon the study of urban markets. These markets, he implies, can be easily identified and separated out. However, it is difficult to conceive of a specifically urban market. For Hirsch they are obvious. He says that ‘it is urban interdependency which leads us to give particular attention to housing, transportation, labour and public service markets’ (Hirsch, 1973, 6). But the definition of these four as constituting prime examples of urban markets is purely arbitrary.

A spatial point of transaction neither delimits the spatial extent of a market nor, more importantly, the determinants of supply and demand (even if it was felt sufficient to limit analysis to supply and demand interrelations). Many factors determining the supply of and demand for a good will be external to an urban area, even in the extreme case of a commodity which is exchanged only a t one location. ,4 separable set of urban markets can consequently be achieved only by assuming the possibility of, and the validity of, isolating the urban characteristics of those transactions. This requires an abstraction from non-urban influences on supply and demand by treating them as exogenous, and then examining the interdependencies in the specifically urban elements that remain. Hirsch offers no basis for making that abstraction. The separation ofthe urban economy has been made without even asking whether is was a valid thing to do.

Edel and Rothenberg (1972) adopt a wider standpoint than that of the market. For them, the key to the definition of urban economics is to find the crucial characteristic of urban areas. This essence of urban-ness is spatial concentration. To quote: ‘If one asks why activities cluster, why these

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activities, and what difference this clustering makes, one has the beginning of an analytic structure of surprisingly wide ramifications’ (Edel and Rothenberg, 1972, 1).

How does research proceed by this method? There are two sequential steps that must be taken: ‘We must approach a phenomenon-first by asking how it fits into the spatial relationships that make up a city, and then probe what special characteristics this spatial linkage imparts to the phenomenon’ (Introduction, p. 1). Urban economics is consequently concerned with the economics of spatial relations but in a particular way: the study of the interrelations between essences of spatial concentration, which have been abstracted from the initial empirical material.

All three definitions have therefore attempted the same thing, the abstraction of urban characteristics from pre-given empirical material. The attempt rests on a specific conception of knowledge. There is a known object which a person is trying to understand. Knowledge is therefore treated as a relation between a knowing subject and a known real object. This is an empiricist conception of knowledge (Althusser, 1970). More- over, this empiricist method fundamentally determines the possibility of a theory of urban economics, as it defines knowledge as being a process of abstraction from reality. The urban analyst is thereby given an epistemological guarantee of the ability to abstract the urban aspects of phenomena and explore their interrelations.

In Edel and Rothenberg’s definition, for example, a real object is treated first by abstracting from its spatial characteristics. This is necessary to see ’how it fits into the spatial relationships that make up the city’. Thus, any phenomenon must initially be divested of space in order that it can subsequently be fitted into a spatial context and the effects produced by space analysed separately. To undertake the latter, the form of abstraction changes to concentrate on the characteristics produced by space: ‘to probe what special characteristics this spatial linkage imparts to the phenomenon’. Any real object can consequently be divided up into separable parts.

The approach has a number of implications. In the first place, space becomes a separate box of theory; one which has a t most only limited effects on non-spatial analysis. Furthermore, abstraction of specifically urban characteristics does not end the process of abstraction. Often too much ‘real world complexity’ still remains; further simplification is required. A classic example is to assume a monocentric location of employment activities within the city centre. This assumption underlies many of the mathematical models of urban location in what has come to be called the ‘new urban economics’ (Mills and McKinnon, 1973). The effects of this assumption and its overall relevance have raised considerable debate (cf. Richardson, 1977). But the debate on such secondary abstractions still remains within an overall position which accepts the possibility of an abstraction of something called the urban.

Spatial characteristics in this approach can be revealed by dividing reality

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into spatial and non-spatial parts. Justification of this attempt at a division of real phenomena is difficult, for problems arise over the meaning of the word ‘real’ once the division has been made. I t would appear that any phenomenon subjected to that division now has two separate realities: one devoid of space and the other spatial.

Nevertheless, the process by which those two realities are produced is hidden once it has been undertaken. What is left after the division is not the original object but a reconstituted object; one that has been reconstituted on the basis of initial theoretical presuppositions. Here the theory assumes that an essence of urban-ness exists in the form of spatial concentration. Real world objects are consequently reconstituted in an attempt to isolate the effects of spatial concentration. Yet the resultant ‘empirical’ material is not treated as a product of that division. Once the spatial component of the ‘real’ has been isolated, the rest of the characteristics of the reconstituted object can be treated as inconsequential or as exogenously given. The question of why that subdivision is possible need not be raised, for the separated parts are regarded as constituting identifiable elements in real phenomena. Once the empiricist method of abstraction has been accepted, therefore, specific characteristics of phenomena can be defined and then analysed as distinct entities.

In this separation possible? Or has the urban dimension been defined on the basis of a fundamental logical inconsistency? In Edel and Rothenberg’s definition, the phenomenon exists first as a reality devoid of spatial characteristics; then it exists as a reality with special characteristics imparted by spatial linkage. And yet it is still supposed to be the same real phenomenon. Two conceptions of the real nature of the phenomenon are given but there is only one phenomenon. These two conceptions must therefore be contra- dictory.

The only conclusion that can be reached is that no adequate concept of the object to be analysed has been formulated; for an impossible unity of two different ones has been proposed. Moreover, an adequate concept cannot be produced if spatial characteristics are to be treated as a separable reality. The spatial dimension must form an element in the determination of a single theoretical concept of an object. Space, in addition, must itself be constructed as a concept within theory and not as an empirical given to which theory submits. Rejection of the empiricist method of abstraction is therefore also a rejection of the idea that theory represents an abstraction f iom reality. Theory is a means of understanding reality, not an abstraction from it.*

If the empiricist method enables a separate urban subject matter to be

* An analogy can be made with the treatment of time and history within the marxist problematic of historical materialism. There an empirical chronology of history as a linear sequence of years and the events that occurred in them is subordinated to a theoretical concept of time marked by changes within and between modes of production (Williams, 1975). Space must be treated in a similar way.

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generated, it also implies that any explanation can deal only with those distilled urban characteristics. Only partial explanations can consequently be produced of any event. When dealing with pressing political questions, the ideological implications of such conclusions are readily apparent. Questions can never be raised about the overall structure of existing social relations, only partial solutions (i.e. reforms) of certain types of spatial interaction can be presented. The necessary existence of social relations across space and the manifestation of class contradictions a t a spatial level can be reduced to quasi-technical problems. Spatial differentiation can be transposed into a general problem of access which can be altered by specific and limited state policies (regional employment incentives, land-use plan- ning, housing subsidies, city size contraints, etc.).

For the issue of racism and the consequential economic problems faced by racial minorities the procedure adopted would be to recognize the existence of the issue a t the national level. Facets of the problems facing racial minorities can, however, be revealed by an analysis of the urban dimension. The placing of racial minorities in the urban framework, it is argued, produces problems which have an identifiable relation to the spatial structure of the city. For example, the problem of ghetto unemployment in the USA can be related to the decentralization ofjobs over the past decades, without a concomitant decentralization of housing opportunities for blacks because of the prejudices of white suburbanites. Regressions can be run (Kain, 1968) to test this hypothesis.

Once having been identified, the spatial linkage between housing and job availability for blacks is therefore treated in relative isolation. This is also true for the policy prescriptions that are proposed. The analysis suggests that the problem should be solved by policies which either encourage the decentralization of black residences or the development of alternative jobs in the central city ghettos. Within this context, debates rage over whether the former policy of workers-to-the-jobs, or the latter one of jobs-to-the-workers is the most effective. But even though it has been isolated, the ability to treat this spatial characteristic as a separable problem from the overall issue of black employment and racism is not a conclusion of the analysis. I t is an inevitable result of the method of abstracting the spatial characteristics of black housing and unemployment. Whether it is valid or not to treat these elements as separate in the explanation of black unemployment cannot be questioned. The method has instead determined the type of answer produced.’

’ It should be noted that this conclusion does not concern the assumptions made by neoclassical economics and its subdisciplines about the behaviour of individuals (firms or consumers) nor of the realism ofits other simplifying assumptions, even though criticisms of the ‘realism’ of those assumptions do form the stock-in-trade of many critiques of neoclassical economics (cf. Hunt and Schwartz, 1972). Instead it is the very nature of the process of abstraction (including its ‘more realistic’ variants) which is being questioned. Here, it concerns the separability of space.

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I1 Urban economics and regression analysis

The previous section raised the difficulty of separating out the urban economy by the use of the empiricist criterion of a subdivision of the real into urban and non-urban aspects. Urban economics was also criticized for not questioning the theoretical possibility of distinctly urban economic issues. But criticizing one way of arriving at a concept does not rule out the possibility of others. Any theorization involves concepts which do not represent total appropriations in thought of the complexity of the real. So why cannot the abstract concept of an urban economy be of use in theories which try to explain real spatial phenomena? Why cannot it have the same status as, say, the concept of a mode of production; not directly mappable onto reality but useful in explaining underlying structural relations?

I t will be argued later that the concept of an urban economy can never be an adequate form of analysis within historical materialism. For historical materialism presupposes the primacy of the dynamic of the social structure over the development of spatial relations. The latter, except in trivial cases, cannot therefore be read off from the former as universal tendencies, but have to be explained as historically specific events.

But urban economists would argue that the separation of the urban economy has proved useful. They would point to the vast amount of statistical work that has been undertaken which demonstrates that there is a certain degree of primacy of urban interlinkages in some cases. Regression analysis, whereby separate independent variables are correlated with a dependent variable in particular functional forms, has been the most common type of statistical analysis used in this work.4

Regressions have come to dominate research in urban economics. Theory is only used in many cases to generate hypotheses to be tested in regression equations, or to provide an attempted explanation of the empirical ‘discoveries’ they reveal. No critique of urban economics can ignore them. It would be possible just to criticize the empiricism of this method. But it is important to say more than this, for regression analysis has reinforced the notion that the urban economy can be separated out. The separability of the influence of the independent variables on the dependent variable is fundamental to regression analysis. Consequently, as a technique

‘ In its most simple form, ordinary least squares regression relates one (or more) independent variables to a dependent variable by estimating the best-fit linear function, e.g. y=a+bx, for the set of data which minimizes the sum of the (squared) errors around that line. The objective is to estimate the intercept term, a, and the coefficient, h. The magnitude of h will indicate, it is claimed, the impact of a change in x upon y. The other important consideration is whether the estimates are statistically significant (i.e. non-spurious).

Even though regression equations are just one particular way of expressing correlations between data and as such imply no relation of causality, the very exposition of the technique shows how important is the implicit notion ofa causal relation between x and y. For a simple introduction to regression analysis see Wonnacott and Wonnacott (1970). Some parts ofthis section of the paper will require a basic knowledge of the regression method.

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it is highly attractive to the urban economist, but it also narrows even further the type of conclusions derived from urban economic analysis.

Many urban economists adopt a position which claims that coincidences between deductions drawn from theories and inductive generalizations drawn from ‘facts’ is the epistemological basis of a valid scientific theory (cf. Berry, 1964). The testing of hypotheses with the facts via regression analysis is a means by which that coincidence can be ascertained. The problem of the possible existence of an infinity of such coincidences is circumvented by having only one initial theory (or two that generate opposing hypotheses) and a categorization of the facts of the basis of that theory’s presuppositions. The claimed usefulness of regression will now be considered, by examining one specific example: the well-known Tiebout hypothesis on the provision of local ‘public goods’.

Tiebout (1 956) suggested that the existence of many municipalities enabled households to choose between the tax/expenditure packages of those areas when deciding where to live. In this way, the impossibility of an optimal provision of public goods through a decentralized pricing system (Samuelson, 1954) was claimed to be partially overcome. Distinct taxlex- penditure packages force potential consumers to reveal their preferences for locally provided public goods, representing a market analogue which could lead to an optimal provision of local public goods. Tiebout’s hypothesis has subsequently been used to justify the fragmented nature of suburban local government in the USA and its present financial structure, in the face of the contemporary fiscal problems of many US cities (Alcaly and Mermelstein, 1977). I t has also generated a considerable body of empirical work trying to verify whether such a behavioural response actually exists.

Tiebout’s conclusions are distinctly unsavoury for many political positions. Criticism ofit must relate to the adequacy ofits theory. For a marxist, this would be structured around a critique of the assumption that the market economy relates consumer preferences to scarce resources. Actual market relations do not conform to this presupposition but to capital and to the production and circulation of surplus value. Similarly, the implicit utilitarian view that the state is concerned with the preferences of ‘consumer-voters’ is a t variance with a marxist analysis. The state is subordinated to the hegemony of capital, and state policies (at the local level as well as nationally) are consequently structured by the conditions necessary to reproduce the dominance of capitalist relations of production.

The spatial level, moreover, has an effect on the contradictions inherent in the provision of services by the state. In the us case, spatial differentiation is a condition for the existence of separate local state organs. The effects of this decentralization will vary depending on the type of activity provided. Analysis ofthose effects, nevertheless, always requires that they be placed in the context of state finance and expenditure in the structure of the us economy as a whole. In capitalist societies the principle contradiction of state expenditure is that it both aids capital accumulation, through facilitat-

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ing the conditions for its extended reproduction, and a t the same time acts as a constraint on accumulation. For unproductive state expenditure must be financed out of surplus value, even though that expenditure facilitates the further production of surplus value. The effects of that contradiction are, however, both temporally and spatially specific. They will depend upon factors such as the stage of capitalist development, the phase in the cycle of accumulation (e.g. boom or slump) and the contemporary ideological and political structure of the social formation. In other words, all those elements that are (glibly) encompassed within the phrase, the state of the class struggle.

A crucial aspect of that principle contradiction in the current us situation is the effects produced a t regional and metropolitan levels. Politically this is expressed as a competitive struggle between local areas, and between the separate layers of the state apparatus (city, state and federal), for levels of expenditure and sources of finance for that expenditure. Analysis cannot, however, be limited to considering differences between localities. If it does it will only reproduce ideologies which avoid the central issues (either in the form of ‘freedom of choice’ d la Tiebout, or of ‘conflicts’ between social groups, e.g. the classic one of suburbanites versus central city dwellers).

Tiebout’s questions about ‘optimality’, and even the concept of a public good, do not arise within the marxist problematic. They can exist only in a problematic which sees economic activity as being structured by consumer preferences. I t has been claimed, nevertheless, that certain empirical studies, particularly those by Oates (Oates, 1969 and Heinberg and Oates, 1970), have demonstrated the existence of consumer behaviour which validates the Tiebout hypothesis.

Oates (1969) interprets the Tiebout hypothesis as implying that consumers should derive positive benefits from local expenditure programmes and negative benefits from the consequential taxes. If different local governments exist, these benefits and taxes should be reflected in house prices, if consumers consider them when making their locational choices. He concludes, ceteris paribus, that relatively high levels of ‘public good’ provision will raise house prices and higher taxes will lower them. Regres- sions are then run to test these hypotheses on average house prices in 53 residential communities in the New York metropolitan region. Public expenditure and taxes will not be the only determinants of house prices, so two other factors are introduced: distance from the city centre and the physical characteristics of the residences and the areas. In common with most house-price studies, the problem of identifying supply and demand functions is avoided by assuming that only demand affects prices.

This classic theory from within urban economics is now ready to be tested. The theory has generated hypotheses about the empirical association between house prices and the two independent variables, tax and expenditure. The test is the significance of these two variables in the regression equation and the sign of their parameters; that of tax should be negative and

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expenditure positive. Before data can be regressed one problem, unfor- tunately, remains. No adequate measure of the level of public service provision is possible (Hirsch, 1968), and the same is true for dwelling and neighbourhood characteristics. Proxy variables have to be used, each of which implies a theory (no matter how banal) relating those proxies to the phenomena that it is hoped to measure. School expenditure per pupil per annum is uwd by Oates as the measure of public service output. This would seem to provide a simple empirical test: households with no children should congrcgate in jurisdictions with low school expenditures, according to Tiebout, to avoid the taxes financing the education of others. This was not tested by Oates. In a sense this is riot surprising as such a separation is unlikely to be empirically true. The choice of the empirical test is not independent of the predilection of the researcher.

Oates’s regressions demonstrate the expected associations but do they demonstrate the validity of the Tiebout hypothesis? There are two issues here: the interpretation of the empirical associations and the validity of the associations that have been discovered. Both issues open up wide areas of controversy.

Taking the issue of interpretation first, both supporters and opponents of the Tiebout hypothesis can easily reject Oates’s conclusions. As with all empiricist methods, the interpretation of regression results depends on the theoretical position of the interpreter. It cannot represent an external test of a theory. Contingent correlations can say nothing about cause. In contro- versial areas of theory, like the Tiebout hypothesis, regression analyses simply generate a voluminous literature of counter-explanations and counter-regressions.

Edel and Sclar (1974), for example, argue that the hypothesized effect on house prices occurs only when the supply of public services is restricted below the equilibrium level. In equilibrium, according to the Tiebout model, marginal demand is equated to marginal cost (willingness-to-pay for schooling would be equated a t the margin to the tax cost of providing that schooling), and no surplus exists that can be capitalized in house prices. The relevant test of the Tiebout model is, therefore, that public expenditure and taxes do not affect house prices! Moreover, the Tiebout model implies that residents of each area will have homogeneous tastes for public services (Edel and Sclar, 1974). Pack and Pack (1977) suggest, not surprisingly, that such a degree of homogeneity is empirically untrue. Finally, Tiebout argues that households choose between expenditure/taxation packages; the two elements are therefore highly correlated. In Oates’s regressions, however, expenditure and taxation are treated as independent variables, so certain municipalities could have a high school expenditure and low taxes, or any possible permutation of the two. The test has not even shown that choices between tax/expenditure packages exist.

Edel and War , nevertheless, still claim that ‘Oates verified that consumer demand conforms to Tiebout’s hypothesis’ (p. 942) because Oates hap-


pened to measure a situation where supply was out of equilibrium. This assertion is not based on a test of the existence of equilibrium (which would be impossible) but on their own theoretical presuppositions about the effects of the Tiebout hypothesis in equilibrium and non-equilibrium situations. The claim is consequently tautological. Many other explanations are just as plausible (if not more so). Analyses of the New York City fiscal crisis have pointed out that many higher-income suburbs avoid local taxes. Welfare payments, for example, are partially financed out of local taxation so that rhe tax burden in areas with larger numbers of low-income households will be greater. A negative association between house prices in different jurisdictions and effective tax rates is hardly surprising, it could just ‘demonstrate’ that the rich do manage to avoid such local taxes. Similarly, richer communities are likely to spend more on educational services, a positive association between property values and educational expenditure is therefore likely to occur. But the causality in both cases is very different from that of Tiebout.

Interpretation requires, however, acceptance of the empirical associations discovered by regression analysis. They are not necessarily obvious associations, after all, but have had to be ‘revealed’ by the regression technique. Regression analysis with its associated tests of significance is an attempt to draw inferences about a population from a sample of that population. The true regression line (if it exists) will never be known; regressions are an attempt to provide a best estimate but they require a number of highly restrictive assumptions. Well-known problems stem from these assumptions, such as heteroscedasticity, multicollinearity and serial correlation. Consequently, regressions are at best only approximations to ‘true’ associations between variables and, furthermore, they can be very poor approximations if the data sample does not correspond to the assumptions. Considerable ingenuity is displayed in attempts to overcome sampling problems, as in the simultaneous estimation of more than one equation. But such procedures only constitute further approximations. In the face of real world populations which often do not correspond to the restrictions required by regression analysis, it requires a considerable act of faith to assert that regression results indicate definite associations within populations, let alone that they constitute verifications or falsifications of hypotheses and theories; even if empirical facts are given such a privileged status.

Practitioners are frequently aware of these difficulties, but this only leads to the classic difficulty with empiricism: ‘facts’ become theoretically contingent. A good example is the problem of bias when the independent variables are highly correlated with the error term in the regression equation. In such cases, little meaning can be placed on the affected coefficients. A partial check for bias is inspection of the correlation matrix. The final decision on potential bias, however, remains with the theoretical presuppositions of the researcher. Oates, for example, suggested that his

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initial estimates were biased, because the tax rate could depend on the dependent variable, house prices. Simultaneous equation estimation was consequently required. This potential bias was identified solely on [heoreti- cal grounds, and was only one potential source of bias. The equation used by Oates was very simple, consisting of seven variables. Other factors affect house prices and if they are correlated with variables included in the equation the latter will have biased coefficients. Inclusion of additional variables can lead, however, to inefficient estimators with few significant coefficients, or to problems of multicollinearity within the equation. The researcher has consequently to choose between two conflicting problems: too few or too many variables.

The choice of variables obviously depends on the theory being tested. But, in additon, so do conclusions about correlations between included and excluded variables. An n priori decision has therefore to be made delimiting potential bias. Such statements can be made only on a understanding of the causal linkages, which can be done only by reference to the theory which is supposed to specify the causal linkages. But this is also the theory (or certain of its conclusions) that is being tested. The initial theory consequently becomes not only what is being tested, but also the arbiter of the goodness ofthe test. The test is not independent of the theory being tested.

Tests of significance play a crucial role as they are treated as the criterion of verification for hypothesized empiricai associations. A significant t-statistic at the 95% level is the normal test of significance in regression, but to derive a statement of association from such a test is simply faulty logic. Tests of significance are attempts to draw inferences about the parent population from which the sample used in the regression is drawn. The test is concerned with randomness of data, not association. The true effect, p, qf X and Y is not knoyn; the regression coefficient represents an estimate, p, of that true effect. p is a random variable varying from sample to sample, whilst ,8 is a fixed magnitude. As long as the population conforms to the assumptions of regression analysis, the distribution of can be shown to be normal, enabling a t-test to be used. For a one-tailed test of the null hypothesis, H,, that p =0, what is being tested is consequently the probability of p (standardized for its estimated standard deviation) being one of the randomly distributed estimates of p=O. Th5 95% level of significance states that there is only a 5% probability of p being an estimate of p=O above a specific t-value for p. If Ho is reject+, all that can be concluded, therefore, is that there is only a 5% chance of p being a random estimate of b=O. To conclude that the sample is unlikely to be randomly drawn from a population where p is 0 does not enable any statement to be made about what p is, Nor, therefore, is it possible to conclude anything about the true relationship between X and Y. Furthermore, even if Ho:p=O cannot be rejected, nothing can be deduced about the influence of the variable in question, X, on the dependent variable Y. I t is often claimed, however, that acceptance of this null hypothesis proves that X has no effect on Y. This is

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not true because if it is hypothesized that X implies Y , nothing can be deduced about Y from the negation of X . N o inference about the association between X and Y can be obtained from a test of significance in a regression analysis. Nevertheless, the use of regression analysis to test hypotheses relics precisely on the drawing of such inferences from a test of significance. In summary, little faith can be placed on the associations it has been claimed have been discovered by regression analysis.

Regression analysis is based on the empiricist assumption that causes are separable. Each independent variable in the regression equation has an association with the dependent variable which is essentially differentiable from the effects of other variables. This is the same assumption of separability that enables an itrhan economics to exist. Regression analysis is, consequently, admirably fitted for use in urban economics. Its use implies far more than just the separability of the urban economy, for almost everything now becomes potentially separable. The urban economy itself can be infinitely divided. The objective becomes the discovery of empirical regularities between two economic variables, say, taxes and house prices, abstracted from anything else by the assumption of ceteris parihus. Explana- tion in urban economics is reduced to arguing about the interpretation of those regularities. But regressions have come to dominate urban economics because of the latter’s fundamental objective: the derivation of general economic functions for cities by a process of sifting them out from urban empirical material.

I11 Explanation and urban economics

1 T l i e method

The task urban economics sets itself is to explain causal relationships between ‘urban’ phenomena. Explanation is attempted in a number of ways. The most common is to assume the existence of an urban economy and to speculate on the interrelations between its elements by a process of model building. Neoclassical economics provides a guide to the type of economic structure that should be modelled and the behavioural postulates for agents assumed to be operating in that Structure. (Many ofthese models are described in the survey by Goldstein and Moses, 1973.)

The relevance of the models to the explanation of reality can then be subjected to a process of verification by treating their conclusions as hypotheses. This method assumes a specific relation between theory and empirical data, in which the former is subordinated to the latter. This is even more apparent in two other common approaches. The first relies less on the specification of an initial theoretical model, exploring instead empirical relationships by a process of speculative hypothesizing. An initial body of theory, such as neoclassical economics, provides the launching pad

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for such speculation. An overall theoretical structure, or model, is not required as the proposed hypotheses are again to be subjected to statistical test. Finally, an alternative sometimes adopted is simply the discovery of statistical regularities without any attempt a t explanation. Of this type, the negative exponential function of population density with increasing density from the city centre (Clark, 1951) is one of the most famous; city size hierarchies are another (Berry, 1964).

All these approaches rely on the assumption that underlying empirical regularities exists between urban phenomena, which are hidden from immediate, casual observation. Two factors account for their being hidden: the presence of random disturbances which cloud perception of the regularities, and the coexistence of many such regularities which overlap and obscure each other.

Statisical methods, like regression, are used to sort out the diverse elements, and to pronounce on cause and effect. Theoretical analysis acts only as an aid in the process of sifting empirical material by providing useful guides to possible correlations between data. Nevertheless, if the theory is claimed to represent the underlying regularities and the mechanisms that produce them, the statistical techniques are also argued to be a verification of that theory. Alternatively, some economists treat theory simply as providing fruitful predictors of events in the real world, without attempting to represent the actual causes of those events. Predic- tion here relies solely on the discovery of an empirical regularity, and on assuming its continued existence in the future. Muth in Citier and housing, for example, partially accepts the lack of realism in the neoclassical theory of urban land use. He justifies its relevance instead by claiming that in the real world, ‘the distribution of population within cities and the quality of their housing exhibit strong regularities and are highly predictable’ (Muth, 1968, 3 ) , and he suggests that ‘long-run comparative static analysis is a highly fruitful source of propositions which stand up quite well to empirical testing’ (p. 95). In other words;empirical regularities exist, and a specific body of theory can predict them. Analyses of actual mechanisms operating consequently does not matter, so it is claimed.

The search for empirical regularities and the process of revealing them through correlation and contingency leads only to probabilistic statements. True knowledge of those regularities can never be achieved.’ Statements of association between data must always be qualified by such phrases as ‘tends to indicate’, rather than enabling absolute statements of association. Pro- vided that the rules of sample selection have been followed, these probabilistic associations can be attributed to the population from which the sample is selected. But because the search for underlying empirical regulari-

Detailed discussion of the epistemological basis of empiricism will not be elaborated in great detail here. Willer and Willer (1973) present a fundamental critique of the empiricist method within social science. Although they refer primarily to its use in sociology, their critique is just as relevant to the empiricism of urban economics.

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ties produces only contingent generalizations, no matter how many times the association is ‘discovered’, no single real event can ever be explained by this method.

An real situation is argued to be determined by several simultaneously existing regularities plus additional random factors. The explanation ofany real event can, therefore, a t best be only partial, stating that it conforms with certain discovered generalizations. Events which do not fit those generalizations must be subject to additional influences, making them deviate from the generalized expectation. And in the absence of a perfect correlation, this will always be the case. All individual cases thus become deviant as they never conform exactly to the generalized expectation.

Examples of this abound within urban economics. Take the case of the ‘trade-off theory of residential location (Alonso, 1964). The Alonso model predicts lower land values and house prices at greater distances from the city centre, ceteris paribus. If any house price is higher rather than lower a t a greater distance, the ceteris paribclr assumption is argued to have been violated. The reason for that deviance can then be hypothesized as, say, a higher quality environment. This can be added to the initial generalization and once again statistically tested. Additional factors can be added to the initial ‘trade-off hypothesis almost ad inzniturn. Every additional generalization weakens the apparent usefulness of the initial one but still no single empirical case is ever explained.

2 Applications

The problem of treating urban phenomena as separable from the rest of the economy has already been raised. But such a separation is necessary to produce generalizations about connections between urban phenomena. It has been argued that the attempt a t separation predetermines the questions asked and the answers produced. The attempt at generalization does the same. This can be seen by examining specific topics covered by urban economics.

There is a vast literature on optimal city size. Numerous attempts have been made to find general empirical relationships between various costs and benefits and city size (Richardson, 1975). The aim of this work has been to arrive at a population size for the optimal city, or a set of numbers for an optimal hierarchy of city sizes. It has seriously been proposed that the United States government should instigate policies for such an optimal array. A theory of optimal city size can only be a general theory, producing rules which are supposed to have almost universal applicability. These rules must therefore completely ignore all the structural influences on the size of any specific urban agglomeration, and the specific role in the national economy as a whole played by the economic activities that exist in the agglomeration.

Optimal city size only extends the general approach of urban economics

Michael Ball 325

to an absurd degree. The theory of urban growth, for example, is concerned with discovering the existence of universal characteristics that determine urban growth or decline. The export base used to be in vogue as this universal characteristic. Others, more recently, have suggested such factors as the supply of entrepreneurial talent (Thompson, 1968) . 6

Urban growth theory searches for quintessential urban characteristics as general causes of urban growth. Its failure to explain anything is consequently not surprising. The rise or decline of an urban area could be caused by a multitude of non-urban factors. Yet questions about specific urban areas are rarely asked. Hoover and Vernon (1959) made an attempt for the New York Metropolitan Region. But most urban economists would treat such exercises as solely descriptive, producing empirical evidence useful only in the process of producing further generalizations about urban growth.

Mills, when considering the theory of urban structure, demonstrates forcibly that it is general urban characteristics that the urban theorist is after.

The goal in theorizing about urban structure is to understand how the urban economy ‘ticks’. Why are certain goods and services produced in urban areas? Why are some produced downtown and some in suburbs? Why are certain areas so much more intensively developed than others? Most important, what are the causes and cures of the problems that afflict urban areas? (Mills, 1972, 53).

With the exception of the last question it would appear that the universal city structure has arrived. The urban economy is a unitary type of economy, analysis of which is applicable to all urban areas. I t does not matter whether they are large financial centres, mining communities, factory towns in which the major employer has just gone bankrupt, or third world cities. Moreover, the process of generalization has led to the endowment of the city, a physical entity, with the characteristics ofa living organism which can be ‘afflicted’ with ‘problems’. Social relations and their consequences at a spatial level for specific classes and strata have been transposed from the sphere of human activity to the city itself; thereby

‘ It is worth quoting Thompson’s argument at length, as it is a good example of the

The stabilization and even institutionalization of entrepreneurship may be the principle strength of a large urban area . . . A popillation ot 50 000 that gives birth to, say. only one commercial or industrial genius every decade might get caught between geniutes at a time ofgreat economic trial such as the loss ofa large employer, but in a population cluster of5 million, with an average flow of ten per year, a serious and prolonged crisis in local economic leadership seems highly improbable (Thompson, 1968, 53).

What such speculation within an ideology reminiscent ofnineteenth-century capitaiism and reactionary social darwinism has to do with modern capitalist economies dominated by monopolies is hard to see. Economic decisions affecting urban areas are invariably made outside of those areas in situations such as in the UK, where in 1970 the hundred largest firms controlled over fifty per cent of manufacturing output. Many ‘commerical geniuses’ would consequently be left in the cold for this reason alone, even if such a species existed. Doubtless, however, Thompson’s creative hypothesis provides the excuse for running many regressions to test its validity.

creative art of speculative hypothesizing.


reducing them to technical problems and not the product of the social structure.

A final example concerns the location of towns. Webber (1972) argues that there are two ways of approaching this question.

O n the one hand, one may ask why a place was established a t a particular point: Why is there a major metropolitan area on the site o f london? Answers to such questions have tended to be unsatisfactory because they refer to one example only, rather than to general Iocational factors. A more useful predictive theory may be derived by examining the second approach: in what ways are places of various sizes spaced? (Webber, 1972, 4).

Webber’s second and preferred way is the procedure of empiricist generalization, but it is interesting to examine his reasons for rejecting the first approach. A number are given in the above quote, the first is that i t considers only one example.

Answers to questions about one example are argued to be unsatisfactory because they do not refer to general locational factors. Once again, the objective of analysis is not the explanation of single events by the production of generalizations; in this case about the location of towns. There is no reason, however, why the explanation of concrete events should be unsatisfactory, provided that it is formulated within an adequate theoretical problematic. Failure to explain events should lead to a questioning of the theory from within which the explanation is provided, instead ofabandon- ing the attempt at explanation by replacing it with another objective. In doing the latter, the relevance of a theory to the understanding of the real world is avoided. As long as a theory corresponds to some hope-for empirical generalization, its usefulness is supposed to be validated: i t does not have to expylnin anything.

Webber’s preferred approach is based on the question ‘in what way are places of various sizes spaced?’ Analysis starts, therefore, from a theoretical position which asserts that general location factors exist. Why should such a general theory of location have any meaning? It implies that locational factors are separable from other economic forces. I t rejects the view that spatial development can only be seen as a part of the overall development of the economy, in which the spatial dimension produces specific effects and contradictions. For Webber, the theory of location has to be based on a general theory of industrial location. Yet he also recognizes that industrial location theory has had little success in relating its behavioural postulates to actual location patterns: ‘Perhaps the main develpment required by location theory is a model which can link individual acts and social patterns under circumstances which reflect reality’ (Webber, 1972, 8). Massey (1974) has demonstrated that it is not the absence of an adequate model within location theory that is the problem, but the attempt to constitute an autonomous industrial location theory. Like urban economics, industrial location theory falls into the trap of a non-existent separability of phenomena. Webber’s hoped-for general location factors for towns can be

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derived only by an empiricist method which attempts to abstract from the specific characteristics of towns by revealing a quintessence of locational causes. The latter can at best remain meaningless generalization; a t worst, it hinders development of adequate analysis of the spatial dimension.

The use of theoretical analysis to understand real events is also replaced by Webber with another objective: that of prediction. Explanation and prediction are not the same; the latter requires calculation about future unknown events. (Predictors assume that nothing will fundamentally change, so that generalizations can be extrapolated into the future.) Only when determinate scientific laws have been produced theoretically do explanation and prediction coincide, and they can never be derived from empirical generalizations. Empirical generalization also only produces probabilistic predictors. Any event, however, either does or does not happen: probabilistic prediction is, therefore, meaningless (Willer and Willer, 1973, chapter 6). Failure to predict, furthermore, does not lead necessarily to a questioning of the analysis on which it is based since the prediction was, after all, only a probable one. The derivation of ‘usefully predictive theories’ in the manner described by Webber can consequently add nothing to knowledge about the objects in question.

IV General economic functions and urban areas

The previous sections have looked a t how urban economics tries to separate out the urban economy, its use of statistical methods and the type of questions it asks, All these are obviously closely interlinked, and each cannot be sustained. This fact might partially account for the staggering lack of success urban economics has had, even within the context of neoclassical economics. Little in the way of new theory or convincing argument has come out of the discipline; masses of data and controversy have been the main outputs. Its prime effect has been an ideological one of furthering the belief that the social problems existing in particular urban areas are essentially technical problems of the spatial structure of the city, problems that are, moreover, to be solved by piecemeal reform or exhor- tation.

Urban economics has foundered on the need for a primacy between urban linkages which it cannot justify. I t would be wrong to assume that the difficulty arises solely from the tendency for urban economics to forget, or treat as exogenous, ‘non-urban’ influences on the economic processes it is trying to analyse. Instead, the major difficulty is the result of the theory of neo-classical economics and its underlying empiricist epistemology. Neo- classical economics does misspecify the causes of processes operating a t the economic level of capitalist societies. But a part of its misspecification consists of the treatment ofits empirical material as being purely external to the theory. So the categories into which that material is classified are

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assumed to be unaffected by that theory. These categories can then be grouped together into what are essentially isolatable subject areas, one of which is the urban. I t consequently does not enable empirical events to be regarded as products of complex structural relations which, because they arc products of the structure, can only bc understood by an analysis of those relations and their dynamic. The latter approach would question the unsubstantiated assumption that identifiable urban economies exist. Conse- quently, it also leads to a questioning of the validity of the category, ‘urban’, as a theoretical concept.

An economics of urban areas cannot, nonetheless, be resurrected by rejecting the neoclassical basis of urban economics. The questions it asks have to be rejected along with the problematic that produced them. An earlier section tried to show what types of issues concerned urban economics, and why it asks the questions it does. The search for general economic functions of urban areas, or general economic problems within urban areas, cannot be justified. Spatial effects are temporally and spatially specific.

Even supposedly technical effects of spatial agglomeration cannot form the basis for such generalizations. Congestion is sometimes cited as one: a necessary consequence of a lot of people congregating together. The latter, however, does not necessarily imply the former. I t depends on how and why the movement of people is taking place. A whole host of questions are thereby raised which have no narrow technical base. Similarly, large-scale industrial production is claimed to produce agglomerations of population; a statement which would puzzle the worker who presses the button in an auto mated factory.

I t is always possible to cite exceptions to empirical generalizations when the latter are not based upon scientific laws. What is required is a theory which does not give empirical generalizations such a status, Generalizations about empirical events do not, of course, have to be derived in an empiricist way. They are, moreover, not necessarily wrong. But it is exceedingly difficult to justify theoretically the existence of general economic functions for urban areas.

Certain marxists have tried it but encountered insuperable difficulties. Castells (1977) tried it, relating the general role of urban areas to the reproduction of labour-power. This role, however, is only asserted by a formal categorization of different spatial levels with particular aspects of the circuit of capitalist production. Its subsequent justification has led to endless difficulties over definition and logical consistency (Harloe, 1979).

Others have tried a different approach, arguing that the process of capital accumulation produces certain laws of tendency a t a spatial level, such as spatial concentration, increasing regional inequality, functional separation of capital accumulation on the basis of centre-periphery relations within a social formation, etc. Economic functions for urban areas can then be read off as effects of these laws of tendency. Laws of tendency when interpreted in this way, however, become idealist generalizations to which concrete

A critique of urban econovnics

Miclrael Ball 329

events must submit. Those events then have essential causes and the real is once again divided into essential and inconsequential. An impossible separability of the real is reimposed.

In the context of a critique it is difficult to elaborate in any detail the way in which the issues confronted by urban economics would be dealt with, and reformulated by, an adequate historical materialist approach. I t is hoped, however, that the argumcnts presented herc will raise doubts about the ability to constitute a n economics of urban areas.

Birkbeck College, London

V References

Alcaly, R.E. and Mermelstein, D., editors, 1977: The fiscal crisis of

Alonso, W. 1964: Location and l a d use. Cambridge, Massachusetts: Har-

Althusser, L. and Balibar, E. 1970: Reading Capital. London: New Left

Berry, 8. 1964: Cities as systems within systems of cities. Papers and

Castells, M. 1977: The urban question. London: Edward Arnold. Clark, C. 1951: Urban population densities. Journal ofthe Royal Statistical

Society, Series A 114, 490-6. Edel, M. and Rothenberg, J. 1972: Readings in urban economics. New

York: Macmillan. Edel, M. and Sclar, E. 1974: Taxes, spending and property values: supply

adjustment in a Tiebout-Oates model.]oumal of Political Economy 82,

Goldstein, G. and Moses, L. 1973: A survey of urban economics.Journal of Economic Literature 1 1, 471-95.

Harloe, M. 1979: Marxism, the state and the urban question. In Crouch, C., editor, State and economy in contemporary captitalism, London: Croom Helm.

Heinberg, J. and Oates, W. 1970: The incidence of differential property taxes on urban housing. National Tax Journal 23,92-8.

Hirsch, W. 1968: The supply of urban public services. In Perloff, H. and Wingo, L., editors, Issues in urban economics, Washington: Johns Hopkins University Press.

American cities. New York: Vintage Books.

vard University Press.

Books.

Proceedings .f the Regional Science Association.

941-54.

1973: Urban economic analysis. New York: McGraw-Hill. Hoover, E. and Vernon, R. 1959: Anatomy of a metropolis. New York:

Hunt, E. and Schwartz, J. 1972: A critique ofeconomic theory. Harmonds- Anchor Books.

worth: Penguin.

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Kain, J. 1968: Housing segregation, negro employment, and metropolitan

Massey, D. 1974: Towards a critique of industrial location theory. London:

Mills, E. 1972: Urban economics. Glenview, Illinois: Scott Foresman. Mills, E. and McKinnon, J. 1973: Notes on the new urban economics.

BelIJourtial of Economics and Management Science 4, 593-601. Muth, R. 1968: Cities and housing. Chicago: Chicago University Press. Oates, W. 1969: The effects ofproperty taxes and local public spending on

property values: an empirical study of tax, capitalization and the Tiebout hypothesis.Journa1 ofPolitica1 Economy 77, 957-71.

Pack, H. and Pack, J. 1977: Metropolitan fragmentation and suburban homogeneity. Urban Studies 14, 191-201.

Richardson, H. 1975: The economics of urban size. London: Saxon House.

Samuelson, P. 1954: The pure theory of public expenditure. Review .f Economics and Statistics 37, 387-9.

Thompson, W. 1965: A preface to urban economics. Baltimore: Johns Hopkins University Press.

1968: Internal and external factors in the development of urban economies. In Perloff, H. and Wingo, L., editors, Issues in urban economics, Baltimore: Johns Hopkins University Press.

Tiebout, C. 1956: A pure theory of local expenditures.Journa1 oj’Politica1 Economy 65, 416-24.

Webber, M. 1972: Impact of uncertainty on location. Massachusetts: MIT Press.

Willer, D. and Willer, J. 1973: Systematic empiricism: critique qf pseudo- science. Englewood Cliffs, New Jersey: Prentice-Hall.

Williams, K. 1975: Facing reality-a critique of Karl Popper’s empiricism. Economy and Society 4, 309-58.

Wonnacott, R. and Wonnacott, T. 1970: Econometrics. New York: Wiley.

decentralisation. Quarterly Journal of Economics 82, 175-97.

Centre for Environmental Studies, Research Paper 5.

1977: The new urban economics: and alternatives. London: Pion.

L’tconomie politique urbaine pretend que des economies urbaines identifiables existent et qu’elles peuvent ttre analystes en tant qu’entitts distinctes prisentant des traits communs. L’habiletC i stparer ces tconomies urbaines et les tentatives faites pour dtcouvrir des rtgularitts empiriques urbaines sont soumises i une ttude critique.

Trois dtfinitions bien connues de l’tconomie politique urbaine sont ttudites. O n y soutient que ces tentatives pour difinir les caracttristiques tconomico-urbaines sont arbi- traires et reposent sur m e subdivison infaisable de la rtaliti en composantes spatiales et non spatiales. Le r6le tenu par l’analyse de la rtgression en tconomie politique urbaine est t tudii ensuite. Les rtgressions sont utilistes i la fois pour justifier les thiories de l’tconomie politique urbaine et pour dtcouvrir des rigularitts empiriques sous-jacentes. Les probltmes crtts par l’utilisation de la rtgression sont illustris par l’ttude de son r6le dans le dtbat sur la justesse de I’hypothtse Tiebout sur les dkpenses et les imp& municipaux.

Le besoin d’identifier l’tconomie urbaine et I’utilisation de I’analyse de la rtgression provient du genre de questions postes au sein de I’tconomie politique urbaine. Une tentative

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est en train d’ttre faite pour essayer de dPcouvrir les fonctions Pconomiques generates dcs zones urbaines. Ce genre de question convient bien i une ipistimologie empirique. De ce fait, il n’est pas surprenant que I’Pconomie politique nioclassique et Ies mithodec statistiques qui lui sont associkes dominent I’analyse de I’Pconomie urbaine.

La recherche de fonctions Pconomiques gintrales des zones urbaines n’est pas uniquement le fait d’une Pconomie politique nioclassique. U n certain nombre de radicaux et de marxistcs ont essay; de redonner vie i des fonctions de ce genre et plus particuliPrement en tant qu’alternatives i la sociologie urbaine. Nianmoins, il est difficile de justifier I’existence de fonctions iconomiques gtnkrales de ce genre pour les zones urbaines. Le genre de questions posees par I’economie politique urbaine a bcsoin d’Ptre reformuli de mPme que 1es rkponses qu’elle essaie de fournir.

Die Stadtwirtschaft behauptet, dass es identifizierbare stadtische Wirtschaften gabe, die als einzelne Gebilde analysiert werden konnten und die gemeinsame Merkmale aufzeigten. Die Fahigkeit, diese stadtischen Wirtschaften auszusondern und die Versuche, stadtische empir- ische Gleichmassigkeiten zu entdecken, werden kritisiert.

Drei allgemein bekannte Definitionen des Begriffs ‘Stadtwirtschaft’ werden betrachtet. Es wird eingewendet, dass diese Versuche, stadtwirtschaftliche Kennzeichen zu definieren, wilkiirlich seien und auf einer unmoglichen Unterteilung der Wirklichkeit in raumliche und nicht-raumliche Komponenten beruhen. Dann wird die von der Regressionsanalyse eingenommene Rolle in dcr Stadtwirtschaft untersucht. Regressionen werden einerseits beniitzt, um die Theorien der Stadtwirtschaft zu rechtfertigen und andererseits, um die zugrunde liegenden empirischen Gleichmassigkeiten zu entdecken. Die durch den Gebrauch der Regression hervorgebrachten Probleme werden durch eine Betrachtung ihrer Rolle in der Debatte iiber die Giiltigkeit von Tiebouts Hypothese iiber Gemeindesteuern und ausgaben dargestellt.

Die Notwendigkeit, die stadtische Wirtschaft zu identifizieren und der Gebrauch der Regressionsanalyse ergeben sich aus der Art der Fragen, die sich in der Stadtwirtschaft stellen. Es wird versucht, die allgemeinen wirtschaftlichen Funktionen von Stadtgebieten herauszufinden. Diese Art von Frage passt der empiristischen Epistemologie. Es ist deshalb nicht erstaunlich, dass die neo-klassische Wirtschaftswissenschaft und die mit ihr verbun- denen statistischen Methoden die Analyse der Stadtwirtschaft beherrschen.

Die Suche nach einer allgemeinen wirtschaftlichen Funktion von Stadtgebieten ist nicht nur der neo-klassischen Wirtschaftswissenschaft eigen. Eine Anzahl von Radikalen und Marxisten haben versucht, diese Funktion wiederzubeleben, besonders als Alternative zur stadtischen Soziologie. Es ist jedoch schwierig, das Uestehen solcher allgemeinen wirtschaftlichen Funktionen in Stadtgebieten zu rechtfertigen. Die Art der von der Stadtwirtschaft gestellten Fragen muss, ebenso wie die von ihr versuchsweise vorgebrachten Antworten, umformuliert werden.

La economia urbana pretende que existen economias urbanas identificables, que se pueden analizar como entidades distintas y que muestran caracteristicas comunes. La capacidad de separar estas economias urbanas y 10s intentos hechos para descubrir regularidades urbanas empiricas estin abiertos a criticas.

Se consideran tres definiciones bien conocidas de economias urbanas. Se arguye que estos intentos de definir caracteristicas de economias urbanas son arbitrarios y se basan en una subdivisi6n imposible de la realidad en componentes espaciales y no espaciales. El papel que juega el anilisis de regresion en las economias urbanas se examina luego. Se usan regresiones tanto para justificar las teorias de la economia urbana como para descubrir regularidades empiricas subyacentes. Los problemas creados por el uso de la regresion se muestran a1 considerar su papcl en la discusibn sobre la validez de la hipotesis de Tiebout a cerca de impuestos y gastos locales.

La necesidad de identificar la economia urbana y el us0 del anilisis de regresi6n proviene del tipo de preguntas hechas dentro de la economia urbana. Se hace un intento para descubrir funciones econ6micas generales de las zonas urbanas. Este tipo de cuesti6n es muy adecuado para la epistemologia empirica. Por tanto no es una sorpresa que las economias neoclisicas y sus correspondientes mitodos estadisticos dominen el anilisis de la economia urbana.

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La bhsqueda de funciones econbmicas generales no es cosa h i c a de la economia neocli- sica. Diversos pensadores radicales y marxistas han intentado resucitar estas funciones en particular como alternativas a la sociologia urbana. No obstante es dificil justificar la existencia de tales funciones econbmicas generales para las zonas urbanas. El tip0 de preguntas que hace la economia urbana han de volverse a formulary otro tanto ha de hacerse con las respuestas que trata de dar a esas preguntas.

A critique of urban economics

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