Urban economics is broadly the economic study of urban areas; as such, it involves using the tools of economics to analyze urban issues such as crime, education, public transit, housing, and local government finance. More narrowly, it is a branch of microeconomics

Microeconomics

Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

 that studies urban spatial structure and the location of households and firms.

Much urban economic analysis relies on a particular model of urban spatial structure, the monocentric city model pioneered in the 1960s by William Alonso

William Alonso

William Alonso was an Argentinian-born American planner and economist.He was born in Buenos Aires and began his career with a bachelor's degree in architectural science from Harvard University in 1954. He also received a master's degree in city planning from Harvard University's Graduate School of...

, Richard Muth, and Edwin Mills.