The effects of output and factor subsidies or taxes on an urban area

This study investigates the effects of five types of factor and output subsidies upon an urban area. It represents an improvement upon prior regional tax or subsidy analyses since it includes a non-traded good in the urban model. Also, the supply elasticities of the three inputs to production; land, labor, and capital are parameterized, thus increasing the generality of the results. A suggested application of the model is to the study of urban decentralization policies in countries with a low or mid-level of development.