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A Stochastic Model Of Competition Between Two Cities For Members Of The Creative Class

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Listed:
  • Amitrajeet A. BATABYAL

    (Arthur J. Gosnell Professor of Economics, Department of Economics, Rochester Institute of Technology, Rochester, NY 14623-5604, USA)

  • Seung Jick YOO

    (Graduate School of International Service, Sookmyung Women's University, Seoul, Republic of Korea)

Abstract

Batabyal and Yoo (2019) have recently obtained a significant result in their analysis of the use of utilitarian and Rawlsian policies by two cities to attract the creative class. They show that if one city switches to a Rawlsian or more egalitarian objective when the other city remains utilitarian, the aggregate economy of two cities becomes less egalitarian. We show that this result depends fundamentally on the assumption that the creative class population can be described by a triangular probability distribution. If this population is modeled instead with an inverted triangular probability distribution then the above result is reversed in the sense that the welfare of the worst-off member of the creative class is always enhanced when one city switches to a Rawlsian or more egalitarian objective, irrespective of the objective of the other city.

Suggested Citation

  • Amitrajeet A. BATABYAL & Seung Jick YOO, 2019. "A Stochastic Model Of Competition Between Two Cities For Members Of The Creative Class," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 37-42, December.
    • Handle: RePEc:hrs:journl:v:xi:y:2019:i:3:p:37-42
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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