class: center, middle, inverse, title-slide # Econ 330: Urban Economics ## Lecture 1 ### John Morehouse ### 08 January, 2020 --- class: inverse, center, middle # Day One: Welcome! --- #Introduction ## Me __Name__: [John Morehouse](https://www.johnmmorehouse.com/) , __Office__: 430 PLC, __Office Hours__: M 5-6 PM, Th 9 - 9:50 AM, __Email__: jmorehou@uoregon.edu -- - Third year Ph.D student. I do research in urban and environmental economics. - Not school: I like bicycling & travel -- ## You - An eager and excited student ready to learn about urban economics - A student that has passed EC201 and has at-least some recollection of what you have learned --- name: schedule # Schedule ## Today -- 1) .hi.purple[Syllabus] 2) .hi.purple[Intro to Urban Economics] -- -- ## Upcoming - EC201 Review Quiz on Canvas - Letter of Intro on Canvas - Reading -- --- name:syllabus # Course Policies All information is on the syllabus, which I __strongly advise__ that you read I want us to discuss the following: -- - Grades - Course Policies -- --- # Syllabus: Grading There are 500 points total. __**Your grade will be determined by:**__ -- - 40%: Final Exam (1x): 200 points - 27%: Midterm Exam (1x): 135 points - 24%: HW (4x, 6% each): 30 points each - 4%: Book Report (1x): 20 points - 4%: Review Quiz (1x): 20 points - 1%: Letter of Intro (1x): 5 points -- --- # Syllabus: Grading .qa[Q]: Is there a curve? .qa[A]: Maybe -- In 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 There will be one midterm and one final -- - __Midterm__: .hi.orange[Feb 11th] (.slate[week 6]) - __Final__: .hi.orange[Wednesday, March 18th @ 12:30] -- -- - _Absolutely_ .hi[no makeups] - However, if approved (by me) you can put .hi.purple[all of the weight from the midterm] on the final (67%) if you must miss the midterm - I will only do this in __extraordinary circumstances__<sup>.hi[†]</sup> -- .footnote[ .hi[†] Don't be afraid to ask if you are unsure. ] --- #Syllabus: Triumph of the City In this class you are required to read [Triumph of the City](https://www.amazon.com/Triumph-City-Greatest-Invention-Healthier/dp/0143120549) by Ed. Glaeser. - .hi[HW]: Occassional question from assigned reading (in addition to questions from lecture content) -- - .hi[Exams]: Ocassional question from the book (_if you do the readings_, the questions will be pretty easy) -- -- - .hi[Book Report]: You are __required__ to turn in a book report at the end of the term - I will post instructions and rubric for the book report around week 3 - The syllabus has a reading schedule. You are free to read the book at a quicker rate -- --- #Syllabus: Homework There will be 4 written assignments throughout the term: - Each one is worth .hi.orange[6% of your grade], for a total of 24% - You __must__ write your answer on the space provided for you on the assignment sheet -- - .hi[Automatic 50% deduction] from that assignment's score for first offense, and .hi[100% deduction] for each time after -- - __No late homework assignments__ will be accepted, and no make - up assignments will be given - .hi.purple[Start them early], as they will cover _a lot_ of material --- # Syllabus: Electronics __ Electronics Policy __ -- - .hi[No cell-phone use during lecture] - Only to be used in emergencies - Cell phone use in non-emergency situations will result in a .hi.orange[1% deduction] from your __course__ grade -- - Laptops: allowed, but please sit in the back of the room - Tablets are allowed for note taking -- __My advice__: take hard-copy (or on the tablet) notes. This helps you: 1) Stay focused during lecture 2) Retain what was done in lecture --- #Lecture Notes As mentioned on Canvas, I will usually post .hi.orange[incomplete] lecture notes within a few hours _before_ lectures - Examples won't be filled in, some definitions might be missing -- - I reserve the right to stop doing this if attendance is too low - __To reiterate__: I believe it is important (for most students) to physically write down definitions, math, and concepts -- .hi.orange[Complete] slides will be posted to [GitHub](https://github.com/johnmorehouse/EC330_UrbanEcon) _sometime_ after lecture<sup>.hi[†]</sup> .footnote[ .hi[†] This might vary from class to class, but they will be posted within a week of the lecture. ] --- # EC201 Review Quiz There is an __online review quiz__ on canvas due .hi[Monday the 13th @ midnight]. You get one try and have a maximum of 1.5 hours to complete it. ## But why? -- - Incentivize you to review EC201. .hi.orange[Low stakes] - Will help you for rest of course -- ## Details - We will review on Thursday what I want you to know. Review will be similar to quiz - Quiz will open Thursday after class --- # First Quiz If you want to start studying early.... 1) Be able to __solve__ for .hi.purple[equilibrium] price and quantity in a model of linear supply and demand - Be able to calculate consumer and producer surplus -- 2) Know the definition of .hi.orange[profit], .hi.orange[total revenue], .hi.orange[total cost] - and how to calculate them (given some information) -- 3) Know the definition of .hi[elasticity] and how to interpret it Review on Thursday, I promise. Also: the the quiz will be extremely similar to our review. --- # This Course This class has two fairly distinct halves: 1. __Philosophy__ & __Tools__ - Why do cities exist? Why do they grow? Why do they decline? - Fundamental tools of labor & urban econ (it's all supply and demand) -- 2. __Applications__ - Rent Control & Minimum Wage - Highways and urban transportation - Income inequality and environmental issues -- --- class: inverse, middle # Checklist 1) .hi[Syllabus]: ✅ 2) .hi.purple[Intro to Urban Economics] - __What is urban economics?__ - __What is a city?__ - __What is a model and why are they useful?__ --- name:what_is_it # Intro to Urban Economics ## What is it? A mashup between .hi[geography] and .hi[economics]. __Economics__: Study of how people and firms allocate scarce resources. - Main framework: utility & profit maximization __Geography__: Studies effects of location and the environment (hydrology, climate, resources, etc.) -- __Economics__ + __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 __distribution__ of people & firms across space impacts: -- - Crime 👮♀ - The Environment ♻️ - Income growth & Inequality 💲 -- We will also examine the efficacy of various .hi[place - based policies] - Minimum Wage - Rent Control - Land Use Restrictions --- # Cities The majority of the US population lives in cities<sup>.smallest[.hi[†]]</sup> ##Questions: -- 1. Do you like cities? 2. What are your top 3 favorite cities (and why?) 3. Are cities at odds with the natural world? -- ##Claim <center> <font size="12"> Location matters </font> </center> -- Not convinced? Let's look at some data -- .footnote[.hi[†]. 80 - ish percent, according to the Census Bureau ] --- # Wage Dispersion
--- #Income & Population <img src="lecture_one_files/figure-html/inc_plot-1.svg" style="display: block; margin: auto;" /> --- # Rent and Population <img src="lecture_one_files/figure-html/rent_plot-1.svg" style="display: block; margin: auto;" /> --- # 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/) --- # 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) --- # Location, Location, Location... So, where you live has implications for -- - Your contribution to .hi.green[global carbon emissions] - _Why does this vary across cities?_ -- - Your .hi.purple[wage] and .hi[rent] - _Why does this vary across cities?_ -- -- - Your .hi.orange[economic mobility] - _Why does this vary across cities?_ -- -- --- # Cities So what is a city? (Pick one of the following) -- 1. This only a question academics would think about 2. It's complicated 3. It's not complicated. Just a lot of people living close together - The absence of space between people -- --- name:what_is_city # The Census Bureau Says... -- - __Urban Area__: a .hi.orange[densely settled geographical area] with: - Minimum population of .hi[2,500] - Minimum density of .hi[500 people per square mile] - __Urban Population__: people living in .hi.orange[urban areas] - __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__: handy abbreviation for .slate[both] .hi[metropolitan] and .hi[micropolitan] statistical area - __Principal City__: the .hi.orange[largest municipality in an MSA] -- --- 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 __explain__ and __predict__ behavior -- __**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 .hi.purple[pros] of models? - Allows for us to be very percise with our language - Gives us the ability to __predict__ the various aspects of the economy - Can shed insight on .hi[mechanisms] through which procceses interact -- 2. .hi.purple[Cons] of models? - They require assumptions - Claim: .hi[Almost] all assumptions are wrong -- -- - __Follow up__ : Not all wrong assumptions are useless -- The ability of the model to .hi.orange[predict data] and .hi.orange[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 <sup>.hi[†]</sup> - Generates downward demand and upward supply 2. Demand and Supply are .hi[linear] 3. Demand and Supply are .hi[deterministic] -- Are these reasonable? .hi.purple[Discuss] .footnote[ .hi[†]: Marginal = Change ] --- class: inverse, middle # Checklist 1. .hi[Syllabus]: ✅ 2. .hi[Intro to Urban Economics]: ✅ - __What is urban economics?__ - __What is a city?__ - __What is a model and why are they useful?__ --- # Planning .hi[Next Class]: - EC201 Review - 5 Axioms of Urban Economics -- .hi[Due Soon]: - Review Quiz (.hi.purple[Monday the 13th] @ Midnight) - Letter of Intro (.hi.purple[Tuesday the 14th] @ Midnight) - Instructions on canvas. Basically free points -- --- class: inverse, middle, center # Thanks! 🔥 <font size="11"> We survived our first day of class! </font> 🔥 --- #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) ] ] --- exclude: true ```r p_load(pagedown) pagedown::chrome_print(here::here("001-intro","lecture_one.html")) ```