Urban Economics
Review for Final Exam
Fall 2014

The final exam questions will be focused on chapters 12, 13, and 15. Materials discussed earlier on in the semester may provide you with theories/evidence to help support/craft your final exam answers.

Chapter 12 – Urban Education

1) Why should we care about education in general?
2) Compare student achievement in urban settings with student achievement outside of urban settings.
3) The educational production function
a) What are the components of the production function and theoretically how does each component factor into attaining higher levels of education
b) What components are thought to have a larger impact on educational attainment?
c) Provide evidence on the effectiveness of each component
4) Using the educational production to guide your answer, can you explain why education in urban areas is on the whole “poorer” than education in non-urban areas?
5) Discuss ways to “fix” the problems faced by urban education.
a) These include financing of public education, teacher compensation, and school choice.
b) For the items listed in part A can you explain how each of these items influences the educational production function and how they can increase positive outcomes (i.e better test scores/educational attainment) associated with urban education?
c) Can you provide specific evidence to support your claims?

Chapter 13 – Urban Crime

1) Describe the differences in crime between urban, suburban, and rural areas. Overall, what has happened to crime during the past 25 years?
2) What are the costs associated with crime?
3) Understand and explain the model of the “Rational Criminal” (Becker, 1968).
a) Use expected utility model to determine whether a criminal will commit a crime or not?
b) How can we change the expected utility of committing a crime in order to make it more “unattractive” to commit a crime.
4) Based on your understanding of the “Rational Criminal”, can you construct the marginal cost/marginal benefit analysis that shows the optimal level of crime from the criminal’s point of view?
a) What shifts both the marginal benefit curve for crime and the marginal cost curve of crime in this model?
b) Can you provide evidence that supports your theoretical observations in part a.
5) According to Glaeser and Sacerdote (1996), why do we have more crime in cities?
6) Based on our discussion of Levitt (2004), what are the reasons for the dramatic drop in crime during the 1990s and what are some of the “false” reasons associated with this drop in crime.
7) What is the optimal level of crime from society’s point of