Comparative statics analysis of a fully closed city

This paper extends the existing comparative statics analysis about open or semiclosed cities, notably that of W. Wheaton [J. Econom. Theor., 9 (2), 223-237 (1974)], to a fully closed city, where urban land rent is redistributed to the city population. Specifically, we examine the effects on changes in exogenous variables, such as population size, agricultural rent, and initial endowments, on endogenous variables such as welfare level, city size, and rent schedule. Most, but not all, of the existing results are reestablished. Surprisingly, it is shown that, in contrast to the existing literature, and perhaps to intuition, the city area may shrink when the city population increases. The paper also extends the existing literature by analyzing the effect of the exogenous variables on the endogenous income and the demand for transportation. It is shown that, under plausible assumptions, the quantity of transportation demanded declines with its price.