Computer Simulation of the Alonso Household Location Model in the Microeconomics Course

Computer simulation of the Alonso household location model can enrich the intermediate microeconomics course. The model includes decisions on location, land space, and other goods and is a valuable complement to the usual textbook model of household consumption. It has three decision variables, one of which is a "bad," and one good's price is a nonlinear function of another decision variable. These instructive complications are easily within the grasp of students. The simulation illustrates algebraic utility functions that are important in later courses. The author describes ways to simulate various versions of the model, from relatively simple to advanced, including a version that incorporates time-allocation decisions, thus giving the instructor flexibility in teaching students of varying ability.