Urban Economics And Real Estate: Theory And Policy
By John F. McDonald, Daniel P. McMillen.
Reviewed by Professor John O. Ifediora.
The second edition of Urban Economics And Real Estate by John F. McDonald and Daniel P. McMillen reminds us, quite forcefully, of the ever-increasing roles cities, metropolis, and regional economies play in the economic welfare of states and nations. In this well-documented book, the reader is made to see clearly the necessary interconnectedness of market forces, public policies, households and business location decisions, and social allocation of resources at local, state and regional levels. Professors McDonald and McMillen begin by explaining the primary objects of the study of urban economics and why they matter; of the stated objects, cities are the most elemental.
Cities, we are told, are at the core of modern economy and society, for they constitute centers of trade, finance, culture, innovation and education; but with these attributes come the hard reality that cities are also epicenters of a host of urban problems such as crime and traffic congestion. Interestingly, all these inform the study of spatial pattern of population density and location decision. Here the authors took care to explain how location decisions, for instance, are influenced by extant public policies on transportation and other local essential services, zoning ordinances, local taxation, and forms of land use. These policies are invariably defined by urban planning strategies adopted, and prevailing urban sociology and politics.
The book is particularly useful to urban planners in both developed and developing nations; for those who must design modern cities and urban areas from scratch as is now commonly done in emerging economies, chapters 10, 11, 15, and 16 are remarkably relevant and instructive. In these sections and other parts of the book, the reader is properly informed that urbanization is an inevitable outcome of economic development. It is, in their words, “the transformation of a society from rural life to life in towns and cities. Employment is transformed from agriculture to mass production, and services. It occurs when society is able to feed itself with a small percentage of its workforce engaged in agriculture.” The same clarity of thought is applied in the treatment of the housing market, and why it is the one market for consumer goods that draws the most attention from governments, especially in developed economies, and increasingly so in developing ones.
This is a very lucid book that gives the reader full access to the expertise of two of the leading Urban Economists in the US. I have had the pleasure and privilege to study under one, Professor John F. McDonald, to whom, for whatever becomes of my professional endeavors, I owe much. Professor McMillen remains very active, and is one of the best minds in the field.