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

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

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.

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File URL: http://www.sciencedirect.com/science/article/pii/S0094119012000642
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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 74 (2013)
Issue (Month): C ()
Pages: 83-98

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Handle: RePEc:eee:juecon:v:74:y:2013:i:c:p:83-98
DOI: 10.1016/j.jue.2012.09.006
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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  9. McKinnish, Terra & Walsh, Randall & White, T. Kirk, 2007. "Who Gentrifies Low-income Neighborhoods?," MPRA Paper 6671, University Library of Munich, Germany, revised Nov 2007.
  10. Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, 2004. "Estimating The General Equilibrium Benefits Of Large Changes In Spatially Delineated Public Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1047-1077, November.
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  16. Dennis Epple & Thomas Romer & Holger Sieg, 2001. "Interjurisdictional Sorting and Majority Rule: An Empirical Analysis," Econometrica, Econometric Society, vol. 69(6), pages 1437-1465, November.
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