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Welfarism and segregation in endogenous jurisdiction formation models

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  • Rémy Oddou

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

Abstract

This paper analyses how welfarism affects the segregative properties of endogenous jurisdiction formation, in a model where local jurisdictions produce a local public good and distribute an allowance to their households, both financed by a proportional tax based on the households' wealth. A jurisdiction is composed of all the households that live in the same place. Local wealth tax rates and the level of the allowance are determined to maximize a social welfare function. Households can "vote with their feet", which means that they can choose to move to the jurisdiction that offers the package "tax rate - amount of public good - allowance" that provides the highest utility level. The main result of this article is the proof that the maximin criterium is more segregative than the utilitarian one.

Suggested Citation

  • Rémy Oddou, 2017. "Welfarism and segregation in endogenous jurisdiction formation models," Working Papers hal-04141624, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141624
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141624
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    References listed on IDEAS

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    1. Gravel, Nicolas & Thoron, Sylvie, 2007. "Does endogenous formation of jurisdictions lead to wealth-stratification?," Journal of Economic Theory, Elsevier, vol. 132(1), pages 569-583, January.
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    3. Gravel, Nicolas & Oddou, Rémy, 2014. "The segregative properties of endogenous jurisdiction formation with a land market," Journal of Public Economics, Elsevier, vol. 117(C), pages 15-27.
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