144B: Urban Economics Nilopa Shah Reference List for Variables from Brueckner:“Lecturers on Urban Economics” Chapter 6 y income per consumer u(c, q) consumer utility as a function of consumption of ‘bread’ (c) and housing (q) q housing consumption; square feet of floor space in a dwelling p rental price of per unit of dwelling P = pq total rent (housing expenditure for renter) v purchase price per unit of housing V = vq total house value (housing purchase price for owner-occupier) i mortgage interest rate h property tax rate d depreciation rate (economic) g rate of capital gains τ tax rate for owner occupier λ tax rate for landlord e accelerated depreciation (over and above d) V value of house at beginning of period V* value of house at end of period D amount of downpayment paid M amount of mortgage borrowed C cost of default O cost of operating a house (borne owner-occupier or landlord) C cost of exercising ‘care’ (borne by owner-occupier or renter) D damage (depreciation in house value) due to the lack of care Department of Economics University of California, Irvine 144B: Urban Economics Nilopa Shah Chapter 7 p rent per square foot of housing H0… He quantity of housing/square feet of floor space S0… Se stock-supply curves of housing D aggregate demand curve for housing ΔH net flow of new housing SΔH flow-supply curve of housing pc controlled rent per square foot of housing y income per consumer q housing consumption (quantity plus quality) c non-housing (‘bread’) consumption u(c, q) consumer utility as a function of consumption of ‘bread’ (c) and housing (q) p rental price of per unit of dwelling β proportion of rent paid by government under the PRS program G = βpq government expenditure per (low-income) household under any program qPRS housing consumption under Proportional Rent Subsidy (PRS) Program qIG housing consumption under Income Grant (IG) Program qHV housing consumption under Housing Voucher (HV) Program qPH housing consumption under Public Housing (PH) Program qmin minimum housing consumption required by building code regulations q* utility-maximizing housing consumption without building code restrictions 
 Department of Economics University of California, Irvine 144B: Urban Economics Nilopa Shah Chapter 9 P level of pollution D(P) total damage resulting from pollution level P MD(P) marginal damage to residents at pollution level P MB(P) marginal benefit to factory at pollution level P P̄ “free pollution” level; no expenditure of pollution abatement by factory P* socially optimal level of pollution; when “social surplus” is maximum Pi pollution level by polluter i Ri pollution right to polluter i s market price for pollution rights Chapter 10 n̄ total number of residents in city indexed by n = 1, 2, … , L ‘loot’ a criminal can steal per period a probability of apprehension (being caught) J dollar cost of spending time in jail due to being convicted e cost of crime-commission nc number of criminals in city (intersection of legitimate income curve with criminal income line) C* level of crime that minimizes overall cost of crime (overall cost of crime = victim costs + crime prevention costs) PR number of police in rich neighborhood PP number of police in poor neighborhood P̄ total number of police in the city ( = PR + PP) CR crimes in rich neighborhood CP crimes in poor neighborhood Department of Economics University of California, Irvine 144B: Urban Economics Nilopa Shah Chapter 11 V(y, p, a) indirect utility as a function of income (y), price per sq. ft. of real estate/housing (p) and amenity level (a) V(y, p, a0) = ū indifference curve representing combinations of y and p that yield a common level of utility (ū), for a given level of amenity (a0) C(y, p, a) cost per unit of ‘bread’ as a function of cost of labor (y), price per sq. ft. of real estate/housing (p) and amenity level (a) C(y, p, a0) = 1 iso-profit curve representing combination of y and p that result in zero-profits for firms, for a given level of utility (a0) a0 low-level of amenity a1 high-level of amenity IC (a0) consumers’ indifference curve in region with low-level of amenity IC (a1) consumers’ indifference curve in region with high-level of amenity Iso-profit (a0) firms’ zero-profit curve in region with low-level of amenity Iso-profit (a1) firms’ zero-profit curve in region with high-level of amenity (y0, p0) income and unit housing price in low (a0) amenity region (y1, p1) income and unit housing price in high (a1) amenity region Q0Lj = ∑i βi aij Quality-of-Life in region j equals weighted sum of amenities, where βi marginal valuation of amenity i, aij level of amenity i in region j β̂i empirically estimated value of β, using ẟ̂i empirically estimated δ from a hedonic housing-price regression µ̂i empirically estimated µ from a hedonic wage regression Department of Economics University of California, Irvine






































































































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