The Mills—Muth Model of Urban Spatial Structure: Surviving the Test of Time?

Abstract

This paper examines the viability of some basic predictions of the Mills—Muth model of city structure for modern cities using US data for the year 2000. The estimation strategy used to test the predictions is very similar to that of Jan Brueckner and David Fansler, who use 1970 data to find support for the model's basic comparative statics predictions—namely, that city area is increasing in population and income but decreasing in agricultural land value and commuting costs. This paper uses different measures for land values and commuting costs where possible and a measure of polycentricity to estimate a slightly modified empirical model. Despite the changing structure of cities, there is evidence that the Mills—Muth comparative statics predictions hold for modern US cities, that densely populated cities are more likely to have sub-centres and that market forces drive urban spatial structure.