Chapter 10: Cities and Urban Economies

Basic sector

The part of an urban or regional economy engaged in the export of goods or services to clients located elsewhere

Central business district

The downtown of an urban area, typically given over to firms that need centralized locations (often to take advantage of agglomeration economies there) and that pay high rents to do so

Direct effects

Employment and income generated at the site of a basic sector establishment, not including subcontracts or expenditures of worker incomes

Economic base analysis

A model of local economies in which the basic, or export, sector is analytically privileged as the motor of local growth

Edge city

Communities in the exurbs, or suburbs distant from downtown


Residential areas on the outermost fringes of urban areas

Filtering model

The view of housing change that holds that lower-income households will move "up" through the housing stock as older homes are made available by the movement of the more well-to-do into newer houses


The growth in incomes and property values in low-income, inner-city neighborhoods associated with either commercial investments or the influx of relatively wealthy professional households

Global city

A city that is a preeminent international location for business decision making and corporate services

Indirect effects

Employment and income effects of a commercial establishment that are generated by its backward linkages and subcontracts to suppliers of goods and services

Induced effects

Employment and income effects of an establishment that arise from expenditures of the wages and salaries that it pays its workers

Industrial restructuring

A term used to refer to the alternating phases of growth and decline in industrial activity. It emphasizes changes in employment between regions and links these with changes in the world economy.


The effect on total employment (or output, wages, and profits) generated by changes in an industry, including interindustry linkages and expenditures resulting from changes in personal income (wages and salaries)

Nonbasic sector

The part of an urban or regional economy that caters to local demand (i.e., it is not export-oriented), including retail sales, real estate, and consumer services

Residential location decision

The process whereby households decide where to live, typically involving trade-offs between rent and commuting costs and subject to budget constraints

Reverse commuting

Daily commuting from city center to suburbs, rather than the opposite direction, which is more common

Spatial mismatch

The mismatch between the supply and demand for skills in a particular region, usually meaning the need for skilled workers and the supply of unskilled ones


The movement of people and economic activity from inner-city regions to the outer rings of a city

Urban hierarchy

The system that ties cities together via various tiers stratified by population size and economic significance

Urban sustainability

Urban growth that can occur over long periods by minimizing environmental impacts