Urban Economics and Its Axioms

 

A self-evident truth is known as an axiom.  This appears to mean that each of these five axioms is something that most people can acknowledge and recognise to be true.  In economics point of view, these five axioms serve as the foundation for urban economics and any future subjects related to urban economics that will be explored.

One of these axioms is prices adjust to achieve locational equilibrium.  This axiom states that prices can vary in accordance with the area's demand until people no longer want to leave their current residence.  The concept of locational equilibrium is what retains Sarawak residents living in Sarawak.  Although in rural area in Sarawak, for example, Kampung Abok are difficult to live in without proper accommodation, property values like house, land, or rental shops are lower due to the perceived value of these neighbourhoods' current qualities.  City of Kuching which is the most populous urban city is expensive to live in.  However, incomes offered in the city are greater, leading to the increase of cost of living.  Hence, more people prefer to live in Kuching in comparison to the rural areas like Kampung Abok.  Hence, the property like home in Kampung Abok and other rural areas are priced lower than in City of Kuching.  Housing, land, as well as salary are always changing and not stagnant to make urbanised regions equally appealing. Society generally will not value all cities equally.  However, with a huge number of cities and numerous of individual situations, cities have the ability to strike a decent equilibrium. 

The second example of this axiom is when we compared the location of the resident.  The first house located in Teluk Melano Beach; while the second house located in City of Kuching.  Both places located in Sarawak.  For instance, in this case, the house prices for both places are the same, there would be a possibility for a person to move into a house located in Teluk Melano Beach.  Thus, we can see that there is an incentive for the person to move from the previous place to another new place.  If a locational equilibrium is reached, then it indicates that there is no desire or incentive for one to move.  To achieve the equilibrium, the house price plays the important role.  The price of the house located in City of Kuching will lower as the rise of the house price located in Teluk Melano Beach.  As a result, someone who could previously afford any house now has an incentive to migrate to the more affordable house they can afford by way of an alternative to the house at the beach that now, only a wealthy people able to reside.