Technological Change Determines Land Costs and Changes in Economic Activity

How Does Technological Change Determine Land Costs and Changes in Economic Activity?

Yago (1983) points out that the conclusions of urban economists and political scientists are similar to those of urban ecologists, though different explanations and evidence are offered about the role and consequence of urban transportation. Economists have elaborated ecological theory by focusing upon how firms and residential consumers of urban land choose to minimize locational costs (Yago, 1983). Assuming rational choice by consumers in their econometric models, the economists posit that consumers (industrial and individual alike) sought to balance land and travel costs as transportation technology increased access to cheaper land. According to Yago (1983), technological changes in transportation (e.g. motorization) removed residential, commercial, and manufacturing activities from locations in the urban core as firms and residents moved outward to minimize land costs. Thus technological change determined travel and land costs, changes in economic activity, and new economic functions affecting urban transportation (Yago, 1983).

Michael Manville, graduate student researcher at UCLA, points out that "parking lots, parking garages, and other accommodations to the private vehicle have profoundly influenced LA's urban form. But transit has generally (in my opinion) followed form, with the exception of the streetcars 100 years ago, which were used to promote dispersal and sprawl (they were owned by real estate speculators, who used them to open up new land for development)."