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Segregation and Tiebout Sorting: Investigating the Link between Investments in Public Goods and Neighborhood Tipping

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  • H. Spencer Banzhaf
  • Randall P. Walsh

Abstract

Segregation has been a recurring social concern throughout human history. While much progress has been made to our understanding of the mechanisms driving segregation, work to date has ignored the role played by location-specific amenities. Nonetheless, policy remedies for reducing group inequity often involve place-based investments in minority communities. In this paper, we introduce an exogenous location-specific public good into a model of group segregation. We characterize the equilibria of the model and derive the comparative statics of improvements to the local public goods. We show that the dynamics of neighborhood tipping depend on the levels of public goods. We also show that investments in low-public good communities can actually increase segregation.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16057.

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Date of creation: Jun 2010
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Publication status: published as "Segregation and Tiebout Sorting: The Link between Place-Based Investments and Neighborhood Tipping," Journal of Urban Economics 74, 2013, pp. 83-98 (with R.P. Walsh).
Handle: RePEc:nbr:nberwo:16057

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  1. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(3), pages 455-506, June.
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  6. Spencer Banzhaf & Eleanor McCormick, 2007. "Moving Beyond Cleanup: Identifying the Crucibles of Environmental Gentrification," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 200702, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2007.
  7. Seema Arora & Timothy N. Cason, 1999. "Do Community Characteristics Influence Environmental Outcomes? Evidence from the Toxics Release Inventory," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 691-716, April.
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  9. Romans Pancs & Nicolaas J. Vriend, 2003. "Schelling's Spatial Proximity Model of Segregation Revisited," Working Papers, Queen Mary, University of London, School of Economics and Finance 487, Queen Mary, University of London, School of Economics and Finance.
  10. Terra McKinnish & Randall Walsh & T. Kirk White, 2008. "Who Gentrifies Low Income Neighborhoods?," Working Papers, Center for Economic Studies, U.S. Census Bureau 08-02, Center for Economic Studies, U.S. Census Bureau.
  11. Rajiv Sethi & Rohini Somanathan, 2004. "Inequality and segregation," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers, Indian Statistical Institute, New Delhi, India 04-03, Indian Statistical Institute, New Delhi, India.
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  15. Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, 2004. "Estimating The General Equilibrium Benefits Of Large Changes In Spatially Delineated Public Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1047-1077, November.
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  18. H. Spencer Banzhaf & Randall P. Walsh, 2008. "Do People Vote with Their Feet? An Empirical Test of Tiebout," American Economic Review, American Economic Association, American Economic Association, vol. 98(3), pages 843-63, June.
  19. Trudy Ann Cameron & Ian T. McConnaha, 2006. "Evidence of Environmental Migration," Land Economics, University of Wisconsin Press, vol. 82(2), pages 273-290.
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Cited by:
  1. Brooks M. Depro & Christopher Timmins & Maggie O'Neil, 2012. "Meeting Urban Housing Needs: Do People Really Come to the Nuisance?," NBER Working Papers 18109, National Bureau of Economic Research, Inc.

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