Sorting by Foot: Consumable Travel-for Local Public Good and Equilibrium Stratification
AbstractThis paper reexamine Tiebout’s hypothesis of endogenous sorting in a competitive spatial equilibrium setup with both income and preference heterogeneity. Agents decide endogenously the number of trips to consume a travel-for congestable local public good. We show that the equilibrium configuration may be completely segregated, incompletely segregated or completely integrated, depending crucially on the scale of local public good services, relative market rents and the underlying income/preference/local tax parameters. Segregated equilibrium may feature endogenous sorting purely by income or by both income and preferences. Multiple equilibria may arise when the equilibrium configuration is incompletely segregated.
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Bibliographic InfoPaper provided by Institute of Economics, Academia Sinica, Taipei, Taiwan in its series IEAS Working Paper : academic research with number 03-A008.
Length: 27 pages
Date of creation: Dec 2003
Date of revision:
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Web page: http://www.econ.sinica.edu.tw/index.php?foreLang=en
More information through EDIRC
Endogenous Sorting; Integrated/Segregated Equilibrium; Income/Preference Heterogeneity;
Find related papers by JEL classification:
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
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