Mechanism of urban agglomeration and FAR regulation

The purpose of this research is to find the mechanism of urban agglomeration based on micro-data in view of the interdependence of various firms and transportation time cost such as face-to-face communication among firms. Firstly, I focus on the speed-density relationship of toll-free roads of the entire city. I estimate this relationship using the time-series cross-section data of several toll-free roads in the twenty-three ward district of Tokyo. Each road section, which is a cross-section observation unit, has a spatial linkage to other sections. Hence this data is likely to have spatial autocorrelation of the disturbances across cross-sectional units. Secondly, I defined economic conditions for the redevelopment/conversion of offices into housing and estimate the redevelopment/conversion probability under the conditions. I found that if random effects are used to control for individual characteristics of buildings, the redevelopment probability rises significantly when profit from land after redevelopment is expected to exceed that from present land uses. This increase is larger in the central part of a city.