ECONOMIC MEASUREMENT OF OPTIMAL CITY SIZE BASED ON THE PRESENCE OF THE GOVERNMENT CASE STUDY: METROPOLISES OF IRAN

The purpose of this study is to determine the optimal size of the metropolises of Iran during the years 2006-2015, by using the surplus function, based on the presence of the government as a provider of public goods and services. To do so, using the total surplus function approach which is defined by the difference between the total income and the total expenditure of the households working and living in the large cities, the optimal size of the metropolises of Iran is estimated. Findings of research show that the total benefits and total costs increase as population of cites increases. The coefficient of population in the household expenditure function is very close to the coefficient of population in total cost function, this means that the expenditure of household in the metropolises of Iran is increasing. The greater the coefficient of population in benefit cost function Than the coefficient of population in total cost function indicates that people living in cities benefit from urban interests, which is the same increase in income and do not participate in paying social costs and this has caused that the size of the metropolises of Iran exceed its optimum level.