ABSTRACT
This chapter aims not only to review the past works but also to present them in a coherent unified framework. For this purpose, we adopt the bid rent function approach which was introduced into an agricultural land use model by von Thiinen [147], and later extended into the urban context by Alonso [2]. This approach is essentially the same as the indirect utility function approach which was introduced into an urban land use model by Solow [136]. A bid rent function transforms indifference curves in commodity space into indifference curves in urban space, i.e., bid rent curves. It is with these indifference curves defined in urban space that we will be able to graphically analyze the locational choice of the household (or firm). Moreover, since bid rent curves are stated as a pecuniary bid per unit of land, they are comparable among different land users. We will therefore be able to analyze competition for land among different agents, again, graphically in urban space. Furthermore, this bid rent function approach will enable us to conduct global analysis in contrast to the traditional local analysis via differential calculus. The same approach will be used in dynamic models of Section 4 by replacing the bid rent function with the bid (asset) price function of land.
