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Place-Based Redistribution in Location Choice Models

Author

Listed:
  • Morris Davis
  • Jesse M. Gregory

Abstract

In recent location choice models, households randomly vary with respect to their utility of living in a location. We demonstrate the distribution generating this randomness is not identifiable from location choice data and the optimal allocation chosen by a social planner is not identified. We propose an algorithm for setting the distribution generating the random utility across locations that implies a planner will optimally choose no redistribution in the absence of externalities or equity motives between different types of people. Our algorithm preserves a planner's motives to redistribute due to equity considerations between types of people and efficiency in production.

Suggested Citation

  • Morris Davis & Jesse M. Gregory, 2021. "Place-Based Redistribution in Location Choice Models," NBER Working Papers 29045, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29045
    Note: ITI LS PE
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    More about this item

    JEL classification:

    • H0 - Public Economics - - General
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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