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The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation

Author

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  • Rémy Oddou

    (Aix-Marseille University and IDEP-GREQAM)

Abstract

This paper analyzes the effect of spillovers and congestion of local public goods on the segregative properties of endogenous formation of jurisdiction. Households living in the same place form a jurisdiction and produce a local public good, that creates positive spillovers in other jurisdictions and suffers from congestion. In every jurisdiction, the production of the local public good is financed through a local tax on household's wealth. Local wealth tax rates are democratically determined in all jurisdictions. Households also consume housing in their jurisdiction. Any household is free to leave its jurisdiction for another one that would increase its utility. A necessary and sufficient condition to have every stable jurisdiction structure segregated by wealth, for a large class of congestion measure and any spillovers coefficient structure, is identified: the public good must be a gross substitute or a gross complement to the private good and the housing.

Suggested Citation

  • Rémy Oddou, 2011. "The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation," Working Papers 2011.46, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2011.46
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    Cited by:

    1. Remy Oddou, 2017. "The effect of a local allowance on the endogenous formation of jurisdictions," EconomiX Working Papers 2017-42, University of Paris Nanterre, EconomiX.
    2. Florian Kuhlmey & Beat Hintermann, 2016. "Public Provision and Local Income Tax Competition," CESifo Working Paper Series 5789, CESifo.
    3. Remy Oddou, 2017. "Welfarism and segregation in endogenous jurisdiction formation models," EconomiX Working Papers 2017-43, University of Paris Nanterre, EconomiX.

    More about this item

    Keywords

    Jurisdictions; Segregation; Spillovers; Congestion;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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