Economics One 2013

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ECONOMICS

Jibgar Joshi

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Syllabus

Basics of Economics: Economics and economicproblems in relations to human settlements; Basicconcepts in economics- economic resources andeconomic concepts of land; Demand and supply;Opportunity or social costs; Internal and external

economics and urban growth; Valuation-marketstructures, equilibrium analysis and pricedetermination; Pricing of public utilities andeconomic infrastructure- marginal pricing vs. othermethods of pricing; Macroeconomic variables;Product and incomenational, regional and

settlement level; Standard of living, PQLI; Economicgrowth and development of human settlements;Keynesian theory of income determination andChanges in the concept of economic development

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Economic Principles and Land Use Planning:Economic principles of land utilization and settlementdevelopment, Economic rent of land and values andland use patterns

Locational economics: factors influencing locationaldecisions; Analysis and location of specific land usessuch as industrial, residential etc.

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Introduction

Anthropocentric

Human behavior to satisfy/achieve ends with the use

of means Science of scarcity

Optimum utilization of scarce resources to producethe best combinations of goods and services that most

satisfies human wants, needs and aspirations

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Definitions

Scarcity is a situation in which there is not enough of aresource to meet all of peoples wants and needs.Resources are said to be scarce when people do nothave enough of them to meet their wants and needs.Everyone faces the problem of scarcity.

Economics is the study of the choices people make andthe actions they take in order to make the best use ofscarce resources in meeting their wants and needs.

Economics studies the allocation of scarce resources insociety as a means of satisfying human needs, wantsand desires. In doing so, it takes into account theavailability of resources, methods for the production of

goods and services, their exchange and the distributionof income within society. Economics is anthropocentricand as such provides useful tools that can supportdecision making.

Economics defines the conditions required to secure themost efficient allocation of scarce resources in a varietyof contexts.

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Human settlements

Settlements of any size from a small rural town to amega polis

Ever-increasing population pressure

The rapid change in the nature of needs and wants Declining ability to produce goods and services Exclusion of a large number of the poor Inequitable access of the poor to urban goods and

servicesKey concern: Production and distribution of urban

goods and services

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Human settlements developmentIn order to raise the living standards of all the people in ourtown (impact),

we aim at the sustainable provision of safe, reliable andaffordable goods and services for all (community,

business, and the government) (outcomes)

with the construction and production of infrastructure andservices (outputs)

through the implementation of the projects and programs(activities)

and through decentralization and divestment and otherappropriate strategies (strategic interventions)

by deploying, mobilizing and managing (process) land,capital, and labor (inputs) owned by the community,

business and the government (stakeholders).5/8/2013 7


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Micro and Macro-economics

Microeconomics is the branch of economics thatdeals with the choices and actions of small economicunits.

Macroeconomics is the branch of economics thatdeals with large-scale economic phenomena such asnational income, inflation, unemployment andeconomic growth.

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Land

Return due to indestructible and original power of thesoil.

The supply of land is fixed. The supply price is zero.

The whole of its return is rent.

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Land is seen as both a private and a public good. The usevalue of land as a private good is obvious. No one canexist without occupying a piece of land; all activitiesmust take place somewhere. To understand the publicgood manifested in land-use, the following points will

be of particular relevance: Except in a marginal sense, land is a permanent asset.

Since it cannot be consumed or destroyed, land ispassed over to successive generations.

Land is also a fixed asset. It cannot be moved around.

The use value of land is largely a function of itsrelative location.

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Much of the values taken on by land are unearned.They are the results of public investments ininfrastructure and services and various social andeconomic processes including urbanization. Thesevalues can be realized in market exchange.

The use of land for any particular function mayproduce externalities. These affect the use ofproximate localities, for instance, pollution and trafficcongestion.

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Seminar Topics

Affordability of Apartment Housing and Economicsof Informal Settlements

Use of Land Pooling Projects for EnhancingEfficiency and Equity in the Kathmandu Valley

Economics of Inclusive Transport Services andSustainable Urban Mobility

Prioritizing Investments for Making Cities moreInclusive

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I. Affordability of Apartment Housing and

Economics of Informal Sector

The purpose is to assess the affordability of AH andsuggest ways and means of making it more affordable

while integrating IS within the urban economy. You

are expected to:

analyze cost effectiveness of AH,

suggest ways and means to make AH more affordableto economically weaker section of the society as well,

make a brief study on the contribution of IS to theurban economy and to housing and social capital they

create.

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II. Use of Land Pooling Projects for Enhancing

Efficiency and Equity in the Kathmandu Valley

The purpose is to ensure better utilization of the

products of land pooling projects in enhancing

efficiency and equity. You are expected to:

list the economic gains of such projects,

analyze the existing condition of their products andthe possibility of exploiting their potentials, and

prepare an action plan for further development in theproject site.

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III. Economics of Inclusive Transport Services and

Sustainable Urban Mobility

The purpose is to link the road network with the goal of

enhancing urban mobility in Kathmandu Valley in a

sustainable way. You are expected to:

make an economic analysis of the recent initiative ofthe government on road widening,

make a rough estimate of the costs involved,

show whether the investments required areeconomically feasible or not, and

suggest strategies for making transport services more

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IV. Prioritizing Investments for Making

Cities more Inclusive

The purpose is to determine investments that will

enhance inclusiveness in the production, distribution

and consumption of urban infrastructure and

services. In order to ensure universal access of

infrastructure and services, you are expected to

prioritize investments for:

enhancing community participation, encouraging private sector, and

integrating informal sector

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Assignment

1. Mention briefly the goals and objectives of humansettlements development? What are the economic problems

of their development? Discuss their contributions to national

and local economy. Discuss how different types of

resources should be managed and mobilized for achievingthe goals and objectives?

2. How is the level of urbanization related with the economic

growth of a nation? Discuss the economic reasons of rapid

urbanization in Nepal? What are the benefits and costs of

urbanization in Nepal?

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3. Discuss different perspectives on land. Explain why

land is considered both as a public good and a private

good. Discuss the economic use of land resources.

What do you mean by the unearned income? How

can this be captured for enhancing the public good?

What are the economic reasons for the rapid increase

in the price of urban land? How does the urban landand real estate market influence urban economy and

productivity?

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4. What are the economic reasons for the growth of

cities? Explain what you mean by agglomerationeconomies and a primate city. Is there anything like

optimum city size? What do you mean by urban

economic base? How can you enhance the

productivity of local economy?

5. Explain the significance of Economic Location

Theory in the placing of different economic activities

within a city. What do you mean by a footlooseindustry? What are the factors that determine the

location of economic activities? Discuss the major

factors that determine the location of central places?

Explain how the land use within a city is determined.19

Documents

Economics One 2013