Econ 330: Urban Economics

# Econ 330: Urban Economics
## Lecture 01
### Andrew Dickinson
### 07 October, 2021

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# Day ~~One~~ Two: Welcome!

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class: white-slide

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#Introduction: About me

.hi[Name:] [Andrew Dickinson](https://economics.uoregon.edu/profile/adickin3/) (please call me Andrew)

- Office: PLC 417, Office Hours: TBD.hi-pink[†], Email: .pink[adickin3@uoregon.edu]

.footnote[.hi-pink[†]: I will hold office hours on Monday starting at 10 am. Not the official time yet]

- Third year PhD student researching:
  - Applied micro topics related to environmental economics
  - Causal inference, ML, and data science

- From San Diego, CA

- I enjoy spending time outside 🤙
  
--

- 🏃, 🏕, 🧗, 🏄, ⛷, 🛶, 🚵‍♂️, etc.
  
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# Introduction: About you

I hope that you:

- Are an eager student ready to learn about urban econ

- Have passed EC-201 with at least .hi[some recollection] of the material

- Excited to be back in class in person

- Own plenty of masks for the remainder of the quarter

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class: inverse
name: schedule
# Schedule

- .hi-white[EC201 review]
  
  - .hi-white[Reading]
  
  - .hi-white[PS01]
]

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name:syllabus
# Syllabus

- Please read the syllabus and consult it first before sending emails!

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# Syllabus: Zoom ground rules

No passwords are turned on for now but we will see if we get bombed

I will try and start the meeting a little early + stay on for OH

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# Syllabus: Attendence

Attendance is .hi[mandatory], lectures will not be recorded

The expectation is that you attend class every day
  
--

- The midterm & final will be administered during class time
    
--

Obviously, given the circumstances there exists some flexibility

- If you must isolate, I will provide you with additional course materials

.hi.orange[Complete] slides will be posted to [GitHub](https://github.com/ajdickinson) _sometime_ after lecture.hi-pink[†]

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# Syllabus: Lectures

When I taught this class remotely, I made slides

However, I have a strong preference to use the board

- Slower; keeps a good pace

I may not have time to adapt the slides into lecture notes

If I use slides, I will post them to a public Github Repository

- They will not include any annotations (examples)

Teach through examples

- Walk through many .hii["important examples"] on the board 😉

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# Syllabus: Grading

There are .hii[500] points total.  .hi[Your grade will be determined by:]

- 40%: Final Exam (1x): 200 points

- 30%: Midterm Exam (1x): 150 points

- 25%: Problem sets (4x): 25 points each

- 10%: Book Report (1x): 50 points

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class: middle
# Syllabus: Grading

Following department policies, for 300 and 400 level classes roughly 65% of the class will receive A’s and B’s.

From the syllabus:

> Your grade will be determined relative to your peers, so during the course, I will not be able to tell you what your exact letter grade is at any point in time, because it depends on everyone’s overall scores of the class.

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# Syllabus: Exams

Under .hi[extraordinary circumstances] I will shift midterm weight to the final
- Entirely by my discretion
- Must contact me before the exam via email
    
--

Roughly 10% of points on the exam will be given for neatness + readability
- I will take points off for poor: Image quality, handwriting

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#Syllabus: Triumph of the City

Required reading [Triumph of the City](https://www.amazon.com/Triumph-City-Greatest-Invention-Healthier/dp/0143120549) by Ed. Glaeser.

- .hi[Problem sets:] Several questions (gifts) from assigned reading

- .hi[Exams:] Several questions (gifts) from the book

- the questions will be pretty easy

- .hi[Book Report:] Due Sunday following the final exam (August 15)

- Instructions and a rubric are posted on the course github + canvas
  
  - Syllabus has the reading schedule. Feel free to read ahead
  
--

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#Syllabus: Homework

There will be .hi[4 problem sets] throughout the term:

- Each one is worth .hii[5%] of your grade

- You must submit a .hi[pdf] document on Canvas***

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# Syllabus: Canvas + Github

- All the important materials will be posted to Canvas

- Homework submission
  
  - Announcements
  
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[Github:](https://github.com/ajdickinson/ec330-summer21)

- Light, public course page with links to all course material

- Do not need an account. It is just easier for me

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class: inverse, middle, center
# What is economics?

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# What is economics?

- Seminal work on economics, four volumes; as important to its field as:

- Newton’s _Principia Mathematica_
  
  - Darwin’s _Origin of Species_
  
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- "Wealth" ("weal")

- Money and other assets
  
  - But also well-being, welfare
  
--
  
- Archaic use of "wealth" make it seem like economics is merely the study of how to get rich

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# What is economics?

In a nutshell:

.center[.hi[Economics is the study of how people make allocation decisions to maximize their happiness when facing limit resources (budgets)]]

There is never enough resources to fulfill all human wants

Scarcity gives us constraints and we do the best _we can_ s.t. constraints

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# Economics "wheelhouse"

Explain how actors .hi[actually behave]; less about how they _should behave_

Normative statements: Matters of opinion; may never be resolved
- Higher ed should be free
  
.hii[Positive statements:] Matters of fact that can be resolved by data
- Who should get federal grants? The best students or the most needy students?
  
--

Figure out what the data say for evidence-based policy making

.hi[Opportunity cost:] What you have to give up by not putting a resource to its _next-best_ alternative use

- Economist use the word .hii[cost] differently than the general public
  - "Cost" is different than "price"

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class: inverse, center, middle
# Intro to Urban Economics

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name:what_is_it
# Intro to Urban Economics

A mashup between .hi[geography] and .hi[economics].

.hii[Geography:] Studies effects of location and the environment 
- Hydrology, climate, resources, etc.

.hi[Economics] + .hii[Geography]  : Study of how individuals and firms choose utility and profit maximizing locations, and consequences of these decisions

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# Intro to Urban Economics

We will study how the .hi[distribution] of people & firms across space impacts:

.pull-left[
  - City growth 🏙
- Crime 👮‍♀
- The environment ♻️]
.pull-right[
  - Income growth & inequality  📈
- Education 🏫
- Employment + wages 🤑]
  
--

We will also examine the efficacy of various .hi[place - based policies]
.pull-left[
  - Minimum Wage
- Rent Control]
.pull-right[
  - Land Use Restrictions
- Sustainability]

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# This Course

This class has two fairly distinct halves:

1. .hi[Philosophy & Tools]

- Why do cities exist? Why do they grow? Why do they decline?
  
  - Fundamental tools of labor & urban econ (supply and demand)
  
--

2. .hi[Application]

- Rent Control & Minimum Wage
  
  - Highways and urban transportation
  
  - Income inequality and environmental issues

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# What is a city?

- .hi[Urban Area:] a .hii[densely settled geographical area] with:

- Minimum population of .hi[2,500]
  - Minimum density of .hi[500 people per square mile]

- Metropolitan Area: an urbanized area with at - least .hi[50k population]
- Micropolitan Area: an urbanized area with at least .hi[10k] but not as many as .hi[50k] people
- MSA: abbrev. for .slate[both] .hi[metropolitan] and .hi[micropolitan] statistical area
- Principal City: the .hi.orange[largest municipality in an MSA]

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# Intro to Urban: Cities

The majority of the US population lives in cities.smallest[.hi-pink[†]] and more people will continue to migrate into urban areas

1. Do you like cities?

2. What are favorite city .hii[amenities]?

3. Are cities at odds with the natural world?

Let's look at some data

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class: inverse, center, middle

## [Data](https://ajdickinson.github.io/ec330-fall21/slides/001-intro/data.html)

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# Intro to Urban: Income & Population

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# Intro to Urban: Rent and Population
 
 
<img src="01-intro_files/figure-html/rent_plot-1.svg" style="display: block; margin: auto;" />

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# Intro to Urban: Economic Oppurtunity

Source: [The Equality of Oppurtunity Project](http://www.equality-of-opportunity.org/neighborhoods/)

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# Intro to Urban: Carbon Emissions

Source: [Colas & Morehouse (2019)](https://drive.google.com/file/d/1-Cn6OiwNJeWksrKi7WG-58th77odfNm4/view)

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# Intro to Urban: Location...

Where you live has implications for

- Your contribution to .hi[global carbon emissions]

- _Why does this vary across cities?_

- Your .hi[wage] and .hi[rent]

- _Why does this vary across cities?_

- Your .hii[economic mobility]

- _Why does this vary across cities?_
  
--

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name:what_is_model
# Our Toolkit

In this class we will make use of various .hi[mathematical models]

1. What is a .hi[mathematical model]?

- A model is a description of a system using .... .hi[math]
  
  - Useful to help .hi[explain] and .hi[predict] behavior

`\begin{align*}
\text{Supply}:\hspace{.1in} P(Q_s) &= 10 + 5*Q_s\\
\text{Demand}: \hspace{.1in}P(Q_d) &= 20 - 2*Q_d
\end{align*}`

This model allows us to make predictions about prices and quantities (from the supply & demand side), _and_ the .hi[equilibrium] price and quantity

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# Models

1. What are the .hii[pros] of models?

- Allows for us to be very percise with our language
  
  - Gives us the ability to .hi[predict] the various aspects of the economy
  
  - Can shed insight on .hi[mechanisms] through which procceses interact
  
--
  
2. What are the .hii[cons] of models?

- They require assumptions
  
  - Claim: .hi[Almost] all assumptions are wrong

--
  - .hi[Follow up:] Not all wrong assumptions are useless
    
--

The ability of the model to .hii[predict data] and .hii[understand mechanisms] determines how useful it is

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# Models Part II

Did we make assumptions our supply/demand model? .hi.purple[Discuss]

`\begin{align*}
\text{Supply}:\hspace{.1in} P(Q_s) &= 10 + 5*Q_s\\
\text{Demand}: \hspace{.1in}P(Q_d) &= 20 - 2*Q_d
\end{align*}`

1. .hi[Marginal values] are diminishing and .hi[marginal costs] are increasing .hi[†]

- Generates downward demand and upward supply
  
.footnote[.hi[†]: Marginal = Adding one additional unit]
  
2. Demand and Supply are .hi[linear]

3. Demand and Supply are .hi[deterministic]

Are these reasonable? Can your behavior be explained by a simple .hi[linear function]?

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class: inverse, middle
# Planning

- EC201 Review

- 5 Axioms of Urban Economics]

- Get the book ASAP!!

- Read the introduction]

---

#Table of Contents

###Intro to Urban Economics
.smallest[

1. [What is Urban Economics?](#what_is_it)

1. [What is a city?](#what_is_city)
  
1. [What is a model and why are they useful?](#what_is_model)

]
]

---

```r
p_load(pagedown)
pagedown::chrome_print(here::here("001-intro","lecture_one.html"))
```