Chapter 7: Urban adaptation to low-probability shocks: contrasting terrorism and natural disaster risk
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All United States metropolitan households and firms face trade-offs in choosing whether to locate in the city center or the suburbs. More and more of these decision-makers are choosing to suburbanize. Suburban locations offer cheaper land prices and a newer, more efficient building stock. Although in the past transportation costs to access the productive city center posed a significant cost of suburbanization, improvements in transportation such as highways and information technology diffusion have dramatically reduced this cost (Baum-Snow, 2007). Starting in the 1960s through the early 1990s, city center quality of life decline introduced a new ‘push factor’ encouraging suburbanization. Major cities suffered from high taxes per dollar of government services, poor inner city public schools, pollution, urban poverty, racial discord and crime (Mieskowski and Mills, 1993).

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