class: center, middle, inverse, title-slide # Econ 330: Urban Economics ## Lecture 01 ### Andrew Dickinson ### 19 July, 2021 --- class: inverse, center, middle # Day One: Welcome! --- #Introduction: About me .hi[Name:] [Andrew Dickinson](https://github.com/ajdickinson) (call me Andrew) - Office: 823 PLC, Office Hours: TBD, Email: .pink[adickin3@uoregon.edu] -- - Third year Ph.D student researching: - Applied micro topics surrounding environmental economics - Causal inference, ML, and data science -- .hi[Not school:] - From San Diego, CA - I enjoy spending time outside 🤙 -- - 🏃, 🏕, 🧗, 🏄, ⛷, 🛶, 🚵‍♂️, etc. --- # Introduction: About you I hope that you: -- - Are an eager student ready to learn about urban econ .hi-pink[synchronously^.pink[†]] .footnote[.pink[†] we will discuss this more soon] -- - Has passed EC-201 with at least .hi-pink[some recollection] of the material -- - Are ready to hit the ground running - this class is going to go fast --- class: inverse name: schedule # Schedule .pull-left[ .ul[.bigger[.hi-gold[Today:]]] .hi-white[(i). Syllabus + Course Policies] .hi-white[(ii). General Economics Discussion] .hi-white[(iii). Intro to Urban Economics] ] -- .pull-right[ .ul[.bigger[.hi-gold[Upcoming:]]] - .hi-white[EC201 review] - .hi-white[Reading] - .hi-white[PS01] ] --- name:syllabus # Syllabus .biggest[[.hi-pink[All information is on the syllabus]](https://www.youtube.com/watch?v=aOIvB2YtAhY)] - Please read the syllabus and consult it first before sending emails! -- .hi[I want to discuss the following:] -- .pull-left[ .hi[(i).] Course policies ] .pull-right[ .hi[(ii).] Grades and grading] --- # Syllabus: Zoom ground rules -- .hi[(i).] Turn your camera on -- .hi[(ii).] Mute mics when not talking -- .hi[(iii).] Do not share images or recordings -- .hi[(iv).] Feel free to interupt me or "raise hand" .hi[(v).] Keep the chat open and use it .hi[(vi).] If there is any technical difficulties tell me -- 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 --- # Syllabus: Attendence -- This class .hii[is not] asynchonous: - I will not make special accomodations - The expectation is that you attend class every day - Obviously, given the circumstances there exists some flexibility - ie. recorded lectures - The midterm \& final will be administered during class time -- .hi[The quality of these lectures increase with participation and attendence] .hi.orange[Complete] slides will be posted to [GitHub](https://github.com/johnmorehouse/EC330_UrbanEcon) _sometime_ after lecture^{.hi-pink[†]} - Will not include any annotations made during lecture .footnote[ .hi-pink[†] This might vary from class to class, but they will be posted within a week of the lecture. ] --- # Syllabus: Grading There are .hii[500] points total. .hi[Your grade will be determined by:] -- - 35%: Final Exam (1x): 175 points - 30%: Midterm Exam (1x): 150 points - 15%: Problem sets (2x): 37.5 points each - 10%: Book Report (1x): 50 points - 10%: Quizzes (x.hii[?]): 50 points -- <br> .center[.qa[Q]: Is there a curve?] -- .center[.qa[A]: Maybe] --- 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. --- # Syllabus: Exams .hi[Midterm:] Monday of week 03 (.pink[August 02]) .hi[Final]: Thursday of week 04 (.pink[August 12]) -- .center[.hi[Absolutely no makeups]] -- Under .hi[extraordinary circumstances] I will shift midterm weight to the final - Entirely by my discretion - Must contact me before the exam via email -- .hi[Drop this course if you are unable to take the scheduled midterm] -- Roughly 10% of points on the exam will be given for neatness + readability - I will take points off for poor: Image quality, handwriting --- #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 -- .hi[This is a suuuuper interesting book and easy to read. Read every night.] --- # Syllabus: Quizzes Several .hii[pop] quizzes will be given out during lecture -- No quizzes will be announced ahead of time -- <br> .hi[They will be easy practice questions with a 24 hour time limit] -- - Incentivize keeping up with the current course material -- - I have not determined the number of quizzes -- This class will move very very fast in 4 weeks - Quizzes are designed to keep you on top of the material --- #Syllabus: Homework There will be .hi[2 problem sets] throughout the term: - Each one is worth .hii[7.5%] of your grade - You must submit a .hi[pdf] document on Canvas -- .center[.hii[No late homework assignments will be accepted]] -- .hi[Start them early], they will cover a lot of material -- <br> .hi[Geared to prepare you for the exams. Think of them as a .ul[study guide.]] --- # Syllabus: Canvas + Github -- .hi[Canvas:] - I hate canvas -- - But I don't have a better alternative - On my to-do list -- - Predominate use is for submitting PS/Quizzes and announcements -- [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 --- class: inverse, middle, center # What is economics? --- # What is economics? .hi[_The Wealth of Nations_] _by_ [Adam Smith](https://www.adamsmith.org/about-adam-smith) (1776) -- - Seminal work on economics, four volumes; as important to its field as: - Newton’s _Principia Mathematica_ - Darwin’s _Origin of Species_ -- - "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 --- # 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 -- .hi[Not just money:] .pull-left[ - Time - Health] .pull-right[ - Land - Natural resources] -- .hi[Economics is very general]; the market lens can be used across many topics --- # Economics "wheelhouse" Explain how people and firms .hi[actually behave]; less about how they _should behave_ - Normative vs positive statements -- - Normative statements: Matters of opinion that may never be resolved - .hii[Positive statements:] Matters of fact that can be resolved by data -- - 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" --- class: inverse, center, middle # Intro to Urban Economics --- name:what_is_it # Intro to Urban Economics A mashup between .hi[geography] and .hi[economics]. .hi[Economics:] Study of how people and firms allocate scarce resources. -- .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 --- # 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] -- <br> .hi[What are the economic drivers behind urban development?] --- # 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 --- # What is a city? -- .hi[The Census Bureau Says...] -- - .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] -- .hi[City:] .blue[Dense collection of people in specific geographic area] --- # 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 .footnote[.hi-pink[†]. 80 - ish percent, according to the Census Bureau] .hi[Questions:] -- 1. Do you like cities? 2. What are favorite city .hii[amenities]? 3. Are cities at odds with the natural world? -- .hi[Why do cities exist?] -- .center[.hi[Location matters]] -- Let's look at some data --- # Intro to Urban: Wages --- # Intro to Urban: Wages --- # Intro to Urban: Income & Population <img src="01-intro_files/figure-html/inc_plot-1.svg" style="display: block; margin: auto;" /> --- # Intro to Urban: Rent and Population <img src="01-intro_files/figure-html/rent_plot-1.svg" style="display: block; margin: auto;" /> --- # Intro to Urban: Economic Oppurtunity <img src="figures/chetty_map.png" width="90%" style="display: block; margin: auto;" /> Source: [The Equality of Oppurtunity Project](http://www.equality-of-opportunity.org/neighborhoods/) --- # Intro to Urban: Carbon Emissions <img src="figures/cm.png" width="80%" style="display: block; margin: auto;" /> Source: [Colas & Morehouse (2019)](https://drive.google.com/file/d/1-Cn6OiwNJeWksrKi7WG-58th77odfNm4/view) --- # 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?_ -- .hi[We will answer these questions as we progress through this course] --- 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 desciription of a system using .... .hi[math] - Useful to help .hi[explain] and .hi[predict] behavior -- .hi[The Canonical Example] `\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 --- # 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 --- # 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]? -- .center[.hi[Does a function even exist?]] --- class: inverse, middle # Planning .pull-left[ .hi-white[Next Class]: - EC201 Review - 5 Axioms of Urban Economics] -- .pull-right[ .hi-white[Reading]: - Get the book ASAP!! - Read the introduction] --- #Table of Contents .col-left[ ###Admin .smallest[ 1. [Schedule](#schedule) 1. [Syllabus](#syllabus) ] ###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) ] ]