Many people are concerned with the problem of urban sprawl. As the development of new housing tracts and suburban shopping malls continues over time, metropolitan areas have become more congested and polluted. Open space disappears, and the quality of life changes. Think of your own metropolitan area, city, or town. Using the concept of externalities, consider the issue of land use and development.

What are the specific decisions made in the development process that lead to externalities? On whom are the externalities imposed? Do you think that they are measurable? In what specific ways can decision makers be given the incentive to consider them? One of the cities that has paid the most attention to urban sprawl is Portland, Oregon. Search the Web to see what you can find out about Portland’s approach.