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The field of urban economics was developed based on the observation that population and economic activity are concentrated in geographic space. Thus, one can define the field of urban economics as the study of the spatial relationships between individuals, households, and firms from an economic perspective. Much of urban economic analysis extends the maximizing behavior of individuals and firms from microeconomics to include how location affects this behavior. A focal point of urban economic analysis is how distance affects maximizing behavior. The fact that there is increased population and employment density at certain points in geographic space indicates that there are advantages of clustering of activity at certain locations. The concentration of activity also has consequences, both positive (i.e., enhanced productivity) and ...