Abstract
The Koopmans and Beckmann (1957) assignment model approach to problems of urban economics has led to considerable discussion. Recent papers (Gördon and Moore 1989; Moore and Gordon 1990; Gordon and Moore in press) review some of the issues raised and suggest extensions that resolve many of the conceptual dilemmas suggested by the original model. Most of the existing approaches surveyed in these previous papers make little use of the duality properties of the assignment model. In this paper duality information provided by the linear version of the Koopmans and Beckmann model is used to explain the utility of transferable development rights (TDR) as land use control policies. In particular, it is shown that aggregate rents accruing to capital are affected by land use plans in ways the current literature ignores. This view emphasizes the importance of TDR policies to city planners and sheds light on how planners can guide optimal urban development.
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