Conclusion and Policy Recommendations
This study developed urban economics models, namely, the partial equilibrium model and the general equilibrium model, to analyze illegal settlements in Palangkaraya city in the Central Kalimantan Province, Indonesia. The partial equilibrium model is aimed at developing a preliminary theoretical analysis. The models are developed by employing the bid rent approach. Because the city is in a tropical region surrounded by river basins and has suffered massive deforestation of its surrounding forest, frequent floods and their corresponding damage to household assets in the city are inevitable.
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