Income Inequality, School Choice and the Endogenous Gentrification of US Cities
Why in some urban areas do rich and poor households cohabit at the community level while, in others, we observe a sorting by income? To answer this question I develop a two-community general equilibrium framework of school quality, residential choice and tax decision. The model predicts that in highly unequal societies low and high income households choose to live in the same community but segregate by schooling. When inequality is smaller, we observe the typical sorting by income across communities. The effect of inequality on the quality of public schools depends on the relative size of the housing market of each community. When inequality increases, if the housing conditions of the community in which rich and poor households cohabit are affordable, then an inflow of high income middle class households towards this community emerges (gentrification). As a consequence, inequality impacts negatively the quality of the public school because both rich and poor households vote for lower taxation.
|Date of creation:||17 Apr 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10473945
Web page: http://www.uclouvain.be/ires
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nechyba, Thomas J, 1999. " School Finance Induced Migration and Stratification Patterns: The Impact of Private School Vouchers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 5-50.
- Gerhard Glomm & B. Ravikumar, 1998. "Opting out of publicly provided services: A majority voting result," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(2), pages 187-199.
- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
- Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
- Davide Dottori & I-Ling Shen, 2009.
"Low skilled immigration and the expansion of private schools,"
Temi di discussione (Economic working papers)
726, Bank of Italy, Economic Research and International Relations Area.
- Davide, DOTTORI & I-Ling, SHEN, 2008. "Low-Skilled Immigration and th Expansion of Private Schools," Discussion Papers (ECON - Département des Sciences Economiques) 2008023, Université catholique de Louvain, Département des Sciences Economiques.
- Dottori, Davide & Shen, I-Ling, 2009. "Low-Skilled Immigration and the Expansion of Private Schools," IZA Discussion Papers 3946, Institute for the Study of Labor (IZA).
- Nico A. Hansen & Anke S. Kessler, 2001. "The Political Geography of Tax H(e)avens and Tax Hells," American Economic Review, American Economic Association, vol. 91(4), pages 1103-1115, September.
- 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.
- Rappaport, Jordan & Kahn, Matthew E. & Glaeser, Edward, 2008. "Why Do The Poor Live In Cities? The Role of Public Transportation," Scholarly Articles 2958224, Harvard University Department of Economics.
- Sean Corcoran & William N. Evans, 2010. "Income Inequality, the Median Voter, and the Support for Public Education," NBER Working Papers 16097, National Bureau of Economic Research, Inc.
- Martinez-Mora, Francisco, 2006. "The existence of non-elite private schools," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1505-1518, September.
- Calin Arcalean & Ioana Schiopu, 2010. "Inequality and Education Funding Theory and Evidence from the U.S. School Districts," Caepr Working Papers 2010-009 Classification-, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:2012006. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST)
If references are entirely missing, you can add them using this form.