Neighborhood effects and the distribution of income in cities
AbstractThe aim of this paper is to explain patterns of household income within an urban area. A particular pattern common to US cities is for a concentration of the poor in the inner city, with higher-income households farther out, and then lower-income households even farther out. It is the non-monotonicity of this pattern that makes it an interesting and difficult phenomenon to explain. This paper shows how this phenomenon can arise due to a mix of population growth and neighborhood effects (externalities). The paper constructs a model of a linear city with inhabitants of different incomes and with properties of varying quality. Computationally, the paper is novel by its use of an agent-based approach. Instead of modeling the city by a set of equilibrium conditions, it determines the outcome according to the decisions of a large number of individual agents, using a simulated auction market that allocates households to properties dynamically. The structure of the city evolves over time in response to the collective outcome of individual decisions. Simulation of the model finds that population growth combined with neighborhood effects can produce a non-monotonic pattern of income. Sensitivity analysis shows how the outcome depends on the characteristics of the city. In particular, it is found that the speed of population growth is very significant. This is important as US cities, particularly in the West and South, have been characterized by rapid population growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by IFReDE - Université Montesquieu Bordeaux IV in its journal The Electronic Journal of Evolutionary Modeling and Economic Dynamics.
Volume (Year): ()
Issue (Month): ()
Contact details of provider:
Web page: http://www.ifrede.org/
Residential Location; Urban Structure; Agent Based Economics;
Find related papers by JEL classification:
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.