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Equilibria with Local Governments and Commuting: Income Sorting vs. Income Mixing

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Author Info
Charles A. M. de Bartolome (University of Colorado)
Stephen L. Ross (University of Connecticut)

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Abstract

Tiebout's (1956) model of fiscal competition suggests income sorting between jurisdictions while the Alonso (1964), Mills (167) and Muth (1969) model of the monocentric city suggests income sorting over space. However, strict income sorting is not empirically observed. We add fiscal competition to the spatial model by considering a circular inner city surrounded by a suburb. The fiscal difference between the jurisdictions and the commuting advantage of locations closer to the city center are capitalized into house prices. In addition to the traditional equilibrium with income sorting, there are equilibria with income mixing - both across jurisdictions and across space.

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Publisher Info
Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2002-01.

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Length: 51 pages
Date of creation: Jun 2002
Date of revision: Mar 2003
Handle: RePEc:uct:uconnp:2002-01

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Keywords: Community; sorting; capitalization;

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Find related papers by JEL classification:
H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns

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References listed on IDEAS
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  14. Epple, Dennis & Filimon, Radu & Romer, Thomas, 1984. "Equilibrium among local jurisdictions: toward an integrated treatment of voting and residential choice," Journal of Public Economics, Elsevier, vol. 24(3), pages 281-308, August. [Downloadable!] (restricted)
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  16. Ross, Stephen & Yinger, John, 1999. "Sorting and voting: A review of the literature on urban public finance," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 47, pages 2001-2060 Elsevier. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Xu, Wenchao & Wu, JunJie, 2009. "Wildland Fire Hazard and Urban Development Pattern: Why California Civil Code 1103 Fails to Protect Households from Wildfires," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49428, Agricultural and Applied Economics Association. [Downloadable!]
  2. Paul Hettler, 2004. "Regional impact of commuter wage taxes," Atlantic Economic Journal, International Atlantic Economic Society, vol. 32(3), pages 191-200, September. [Downloadable!] (restricted)
  3. Nathaniel Baum-Snow & Byron Lutz, 2008. "School desegregation, school choice and changes in residential location patterns by race," Finance and Economics Discussion Series 2008-57, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  4. Francisco Martínez Mora, 2004. "The impact of fiscal decentralization on income segregation," Economic Working Papers at Centro de Estudios Andaluces E2004/68, Centro de Estudios Andaluces. [Downloadable!]
  5. Charles A. M. de Bartolome & Stephen L. Ross, 2002. "The Race to the Suburb: The Location of the Poor in a Metropolitan Area," Working papers 2002-02, University of Connecticut, Department of Economics, revised May 2008. [Downloadable!]
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