The Race to the Suburb: The Location of the Poor in a Metropolitan Area
AbstractWe provide an explanation for the stylized fact that poor households are concentrated in the inner city of most U.S. metropolitan areas. We consider a metropolitan area with an inner city surrounded by a suburb and two income classes. Using numerical simulations, we show that two equilibria typically exist: one in which the inner city has a majority of poor households and the other in which it has a majority of rich households. We argue that the growth path selects the former equilibrium because rich households "jump" to the suburb before poor households "spill" into the suburb. In addition, the model provides an explanation for gentrification: at large metropolitan populations, population growth causes rich households in the city to live in areas previously inhabited by poor households.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2002-02.
Length: 59 pages
Date of creation: Aug 2002
Date of revision: May 2008
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urban; equilibria; poor;
Find related papers by JEL classification:
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
This paper has been announced in the following NEP Reports:
- NEP-CDM-2002-10-18 (Collective Decision-Making)
- NEP-PBE-2002-10-18 (Public Economics)
- NEP-URE-2002-10-18 (Urban & Real Estate Economics)
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