Location theory, among other things, attempts to explain and predict the locational decisions, and the spatial patterns of that are the products of the aggregate locational decisions (Levy, 1990, pp. 4-8). The initial assumption upon which location theory was based was that entrepreneurs attempted to maximize profits in the context of prices fixed by the market, where they possessed perfect information concerning the relative costs associated with all potential locations. Thus, early location theory explained all locational decisions in the context of differences between potential locations with respect to production and transportation costs. This conceptual approach also was applied to location decisions by public entities.

While urban economics is concerned with location patterns of households, firms, and other entities which locate in densely developed areas, the body of knowledge also encompasses such considerations as how the patterns of location evolve and change, how the patterns of location are affected by government expenditures, taxes, and regulations, and how the patterns of location affect the economic performance of both firm

Some degree of effort will be required to arrange and conduct the interviews necessary to collect the required data; however, the task is feasible. Approximately six weeks will be required to complete the data collection process, and the costs of the data collection task may be expected to approximate $300.

Cost/benefit analysis is the tool most often used in the to assess the merits of public projects, whether they be the protection of the environment, job retaining programs, public housing location, or whatever (Levy, pp. 284-349). Benefit/cost analysis is a technique that purports to identify and evaluate the social benefits and social costs of an investment. In the context of public housing location policy, the term investment is used in a broad context, although it still refers to an expenditure, at some level of real capital goods. Real capital goods, in this instance, refers to social capital, which is the sum total of capital stock possessed by an economy as a whole.

Making downtown livable. (1994, 3 October). Nation's Cities Weekly, 17(40), 7-8.