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NYC 9/11 Public Portal Document

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Transportation studies were originally staffed and planned by engineers, and not by economists. Economic theory did not prove very useful in studying transport behavior, especially since it was widely observed that people in similar situations made dissimilar choices about their mode and distance of travel. At that time economics had no adequate explanation for this, and the engineers operated with ingenious "diversion curves" and "gravity models". (These were found in the 1970s to have anticipated the discovery of the family of "discrete choice models".) At the same time, up until about 1960, transport studies tended to neglect the impact which transport changes would have on the locations of travelers, and hence to underestimate the derived demand which would later swamp many urban vehicular facilities. The responses to the need for closing the circle of transport demand and supply by taking into account locational effects was not long in coming. One trend, started by Ira S. Lowry, extended the ad hoc approach of the engineers and took account of the variety of human behavior in the land and travel markets. Another approach, independently initiated by Lowdon Wingo and William Alonso, built a new explanation of residential location on neo-classical economic location theory. These investigators showed how the substitution for each other of space costs and benefits on the one hand and travel costs and inconvenience on the other hand would generate competition for land. This competition led to sorting out the occupancy of urban land into concentric rings which were denser and held poorer occupants toward the center. In these theories and their consequent models, people of a given class or income behaved uniformly, partly contrary to experience. And most unrealistically, it was assumed that all employment was at the center. A critically important feature of these models was that their solution led to a distribution of population into housing which was "Pareto optimal". This means that under the given assumptions about the income distribution and the available jobs, land, housing, and transportation facilities, people would be located so that no one could be moved to make him better off without making someone else worse off. This optimum also corresponded to a market-clearing equilibrium in which everyone was housed at their best achievable levels, and all land was assigned to the highest bidder. At the same time, progress was being made in understanding the exact mechanisms of retail trade location. The old idea (found in Central Place Theory) that people would shop for a given type of good only at the nearest center offering that good was replaced by a new approach using the gravity model to distribute shopping behavior in a varied fashion. Lowry introduced a simplified model of trade centers which depended on this approach, and which linked trade location with residential location.

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