A comment on gasoline prices and urban structure

The effect of higher gasoline prices on urban concentration and aggregate work travel is investigated with a simple closed-city general equilibrium model used by Robson and Scheffman. Their approximate solution is shown to be invalid at reasonable parameter values; for the case of a Cobb-Douglas utility function, numerical solution indicates a long-run reduction in average trip length of 1.4% to 2.9% from an increase in transportation cost of 0.5 cents per mile. It is noted that this is still much larger than estimates obtained by other means.