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On the Strategic Community Development

Author

Listed:
  • Henderson, J Vernon
  • Thisse, Jacques-François

Abstract

This paper examines strategic behaviour of developers who, through offering different public good packages and revenue/fiscal schemes, compete for residents who are differentiated by income. There is an endogenous determination of numbers and sizes of communities. Developers have an incentive to strongly differentiate their public good offerings. In terms of pricing strategies, developers exhibit sharply contrasting behaviours. In low-income communities housing consumption is subsidized once lots are priced. In high-income communities housing consumption is generally taxed.

Suggested Citation

  • Henderson, J Vernon & Thisse, Jacques-François, 1997. "On the Strategic Community Development," CEPR Discussion Papers 1550, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1550
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    Citations

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    Cited by:

    1. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    2. Abdessalam, A. H. Ould & Kamwa, Eric, 2013. "Tax competition and determination of the quality of public goods," Economics Discussion Papers 2013-31, Kiel Institute for the World Economy (IfW).
    3. Abdessalam, A. H., 2014. "Tax competition and the determination of the quality of public goods," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 8, pages 1-20.
    4. Massimo Del Gatto, 2004. "Agglomeration, Integration, and Territorial Authority Scale in a System of Trading Cities. Centralisation versus Devolution," Working Papers 2004.93, Fondazione Eni Enrico Mattei.

    More about this item

    Keywords

    Land development; Strategic pricing; Tax Competition; Tiebout Model;

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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