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Placing the poor while keeping the rich in their place

Author

Listed:
  • Jonathan P. Caulkins

    (Carnegie Mellon University)

  • Gustav Feichtinger

    (Technische Universität Wien)

  • Dieter Grass

    (Technische Universität Wien)

  • Michael Johnson

    (Carnegie Mellon University)

  • Gernot Tragler

    (Technische Universität Wien)

  • Yuri Yegorov

    (Institut für Höhere Studien – Institute for Advanced Studies (IHS))

Abstract

A central objective of modern US housing policy is deconcentrating poverty through "housing mobility programs" that move poor families into middle class neighborhoods. Pursuing these policies too aggressively risks inducing middle class flight, but being too cautious squanders the opportunity to help more poor families. This paper presents a stylized dynamicoptimization model that captures this tension. With base-caseparameter values, cost considerations limit mobility programs before flight becomes excessive. However, for modest departures reflecting stronger flight tendencies and/or weaker destination neighborhoods, other outcomes emerge. In particular, we find state-dependence and multiple equilibria, including both de-populated and oversized outcomes. For certain sets of parameters there exists a Skiba point that separates initial conditions for which the optimal strategy leads to substantial flight and depopulation from those for which the optimal strategy retains or even expands the middle class population. These results suggest the value of estimating middle-class neighborhoods' "carrying capacity" for absorbing mobility program placements and further modeling of dynamic response.

Suggested Citation

  • Jonathan P. Caulkins & Gustav Feichtinger & Dieter Grass & Michael Johnson & Gernot Tragler & Yuri Yegorov, 2005. "Placing the poor while keeping the rich in their place," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 13(1), pages 1-34, July.
  • Handle: RePEc:dem:demres:v:13:y:2005:i:1
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    File URL: http://www.demographic-research.org/volumes/vol13/1/13-1.pdf
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    References listed on IDEAS

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    1. Betts, Julian R. & Fairlie, Robert W., 2003. "Does immigration induce 'native flight' from public schools into private schools?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 987-1012, May.
    2. Caulkins, Jonathan P. & Feichtinger, Gustav & Johnson, Michael & Tragler, Gernot & Yegorov, Yuri, 2005. "Skiba thresholds in a model of controlled migration," Journal of Economic Behavior & Organization, Elsevier, vol. 57(4), pages 490-508, August.
    3. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    4. Xavier de Souza Briggs, 2003. "Housing opportunity, desegregation strategy, and policy research," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(2), pages 201-206.
    5. Galster, George, 2002. "An economic efficiency analysis of deconcentrating poverty populations," Journal of Housing Economics, Elsevier, vol. 11(4), pages 303-329, December.
    6. Robert Fairlie, 2002. "Private schools and “Latino flight” from black schoolchildren," Demography, Springer;Population Association of America (PAA), vol. 39(4), pages 655-674, November.
    7. George Galster, 1988. "Residential segregation in American cities: A contrary review," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 7(2), pages 93-112, May.
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    Cited by:

    1. Grass, D., 2012. "Numerical computation of the optimal vector field: Exemplified by a fishery model," Journal of Economic Dynamics and Control, Elsevier, vol. 36(10), pages 1626-1658.
    2. Herbert Dawid & Engelbert Dockner & Richard Hartl & Josef Haunschmied & Ulrike Leopold-Wildburger & Mikulas Luptacik & Alexander Mehlmann & Alexia Prskawetz & Marion Rauner & Gerhard Sorger & Gernot T, 2010. "Gustav Feichtinger celebrates his 70th birthday," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(4), pages 437-451, December.

    More about this item

    Keywords

    housing policy; multiple equilibria; negative externality; optimal control; segregation; separation; Skiba point;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

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