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The effect of congestion and spillovers on the segregative properties of endogenous jurisdiction structure formation

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  • Rémy Oddou

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper analyzes the effect of inter-jurisdictional spillovers and congestion of local public services on the segregative properties of endogenous formation of jurisdictions. Households choosing to live at the same place form a jurisdiction, the aim of which is to produce congested local public services, resulting in generate positive spillovers to other jurisdictions. In every jurisdiction, the production of the local public services is financed through a local tax based on households' wealth. Local wealth tax rates are democratically determined in every jurisdiction. Households consume the available amount of public services in their jurisdiction and a composite private good. Any household is free to leave its jurisdiction for another that would increase its utility. A necessary and sufficient condition to have every stable jurisdiction structure segregated by wealth is identified: the public services must be either a gross substitute or a gross complement to the private good.

Suggested Citation

  • Rémy Oddou, 2014. "The effect of congestion and spillovers on the segregative properties of endogenous jurisdiction structure formation," Post-Print hal-01611392, HAL.
    • Handle: RePEc:hal:journl:hal-01611392
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    Cited by:

    1. Shagaida, Natalia (Шагайда, Наталья), 2016. "Mechanisms of State Regulation of the Use of Agricultural Land for Construction Purposes: International and Russian Experience [Механизмы Государственного Регулирования Использования Сельскохозяйст," Working Papers 2864, Russian Presidential Academy of National Economy and Public Administration.

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