Tests of Locational Equilibrium in the Standard Urban Model

The standard urban economic model was developed during the 1960s as economists sought to provide an economic explanation for important trends in urban spatial structure. The principal works include Alonso (1965), Mills (1967, 1972), Muth (1969), and Meyer, Kain, and Wohl (1965). The distinctive features of the model are the explicit introduction of spatial considerations and the concept of locational equilibrium. An urban household achieves locational equilibrium when the marginal benefits of moving farther from the city center equal the marginal costs. Proponents of the standard model use it to argue that the urban decentralization observed in the U.S. is consistent with rational economic behavior