An Agent-Based Model of Coupled Housing and Land Markets

This paper describes a spatially disaggregated, economic agent-based model of urban land use that includes explicitly specified and coupled land and housing markets. The three types of agents— consumer, farmer and developer—all make decisions based on underlying economic principles, and heterogeneity of both individuals and the landscape is represented. The model can be used to simulate the conversion of farmland to housing development over time, through the actions of the agents in the land and housing markets. Land and building structures in the housing bundle are treated explicitly, so the model can represent the effects of land and housing prices on housing density over time. We use the model to simulate the dynamics of land use changes as a representative suburban area grows. The presence of agent and landscape heterogeneity, stochastic processes, and path-dependence require multiple model runs, and the expression of spatial dispersion of housing types, overall housing density, and land prices over time in terms of the most likely, or ‘average’, patterns. We find that the model captures well both the general tendency for diminishing population density at greater distances from the center city, and dispersed leapfrog patterns of development evident in most suburban areas of the U.S.