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Is it better to live in a US or a European city?

  • Tivadar, Mihai
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    We examine equilibria for a city where amenities are generated and valued by a social group, the rich. We considered two types of spatial structures: the American equilibrium (where rich households are located at the periphery) and the European equilibrium (where the rich households are concentrated in the central part of the city), proving that both can exist, and deriving their conditions. We find that the European equilibrium is more restrictive than the American one. The second main result is that, in terms of welfare, the American structure is superior to the European one.

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    File URL: http://www.sciencedirect.com/science/article/B6V89-4YRHCK9-1/2/bd7d6271cd1dac3fe2cf17a44e0f42b4
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    Article provided by Elsevier in its journal Regional Science and Urban Economics.

    Volume (Year): 40 (2010)
    Issue (Month): 4 (July)
    Pages: 221-227

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    Handle: RePEc:eee:regeco:v:40:y:2010:i:4:p:221-227
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    1. Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999. "Why is central Paris rich and downtown Detroit poor?: An amenity-based theory," European Economic Review, Elsevier, vol. 43(1), pages 91-107, January.
    2. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
    3. LeRoy, Stephen F. & Sonstelie, Jon, 1983. "Paradise lost and regained: Transportation innovation, income, and residential location," Journal of Urban Economics, Elsevier, vol. 13(1), pages 67-89, January.
    4. de Bartolome, Charles A. M. & Ross, Stephen L., 2004. "Who's in charge of the central city? The conflict between efficiency and equity in the design of a metropolitan area," Journal of Urban Economics, Elsevier, vol. 56(3), pages 458-483, November.
    5. de Bartolome, Charles A.M. & Ross, Stephen L., 2007. "Community income distributions in a metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(3), pages 496-518, May.
    6. Wheaton, William C, 1977. "Income and Urban Residence: An Analysis of Consumer Demand for Location," American Economic Review, American Economic Association, vol. 67(4), pages 620-31, September.
    7. Jean Cavailhès & Harris Selod, 2003. "Ségrégation sociale et périurbanisation," INRA Sciences Sociales, INRA Department of Economics.
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