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Location Differentiation of Housing Market In The Presence of A Unanimous Characteristic

Author

Listed:
  • Bong-Ju Kim

    (National Assembly Budget Office)

  • Seung-Nyeon Kim

    (Hankuk University of Foreign Studies)

Abstract

This paper examines how the presence of a unanimous characteristic affects housing locations. An example of the unanimous characteristic, considered in the paper, is the regional educational environment. Our findings are as follows. First, if the relative attraction of the unanimous characteristic is over a critical threshold, maximal differentiation no longer holds. Second, as the transportation cost is lowered, agglomeration forces are intensified-both in social optimum and competitive outcome. Third, since allowing competitive suppliers to determine their locations results in suboptimal outcomes, the government may need to intervene with a subsidy-tax scheme. However, the marginal benefit of the government intervention would decrease with improvement in transportation system.

Suggested Citation

  • Bong-Ju Kim & Seung-Nyeon Kim, 2007. "Location Differentiation of Housing Market In The Presence of A Unanimous Characteristic," Korean Economic Review, Korean Economic Association, vol. 23, pages 353-377.
    • Handle: RePEc:kea:keappr:ker-200712-23-2-06
    as

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    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-200712-23-2-06.pdf
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    References listed on IDEAS

    as
    1. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818728, September.
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    More about this item

    Keywords

    Unanimous Characteristic; Location Differentiation; Transportation Cost;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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