A theoretical analysis of the economic structure of the factory town

Abstract

This thesis is a theoretical investigation of the structure of the factory town. The study considers both the positive and normative economic aspects of an isolated town. The optimum industrial state, consisting of a factory town and its economically associated agricultural zone, is also investigated. The structure of the residential zone of the town is expressed in terms of household preferences in respect to consumption of the factory produced good, the services of residential space and leisure time, the allocation of land to transport and transport congestion. The areas of the factory and the town and the population of the town are obtained as implicit functions of the values of the marginal products of land and town population. Expressions for returns to scale in factory production at the optimum and equilibrium points are derived. Some comparative static analyses of the optimum town are presented using the opportunity cost of land, a transport parameter and population density as shift parameters. Conditions for equilibrium in a company town are derived, and it is shown that a general equilibrium involving production in factories cannot be competitive. Show more