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Segregation and Tiebout sorting: The link between place-based investments and neighborhood tipping

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  • Banzhaf, H. Spencer
  • Walsh, Randall P.

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.

Suggested Citation

  • Banzhaf, H. Spencer & Walsh, Randall P., 2013. "Segregation and Tiebout sorting: The link between place-based investments and neighborhood tipping," Journal of Urban Economics, Elsevier, vol. 74(C), pages 83-98.
    • Handle: RePEc:eee:juecon:v:74:y:2013:i:c:p:83-98
    DOI: 10.1016/j.jue.2012.09.006
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    More about this item

    Keywords

    Segregation; Tipping; Public Goods; Place-based Investment;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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