Protections from natural disasters as local public goods: Migration and local adaptations

Chen-Yu Pan

Regional Science and Urban Economics, 2020, vol. 85, issue C

Abstract: We investigate a two-location local public goods economy in which agents choose their residential location and are faced with location-specific disaster risks. The majority of residents determine the amount of local public protection financed by local income tax. We assume constant relative risk aversion utility functions with basic housing consumption and show that the equilibrium allocation is sorted. When disaster risks in a location increase, population and housing prices decrease while tax rates increase, but the opposite occurs in the other one. Moreover, we evaluate policy tools, including federal aid and the inter-jurisdiction transfer. We find that in-kind transfers harm the poor in the riskier location by increasing housing prices, whereas the money transfer can be beneficial.

Keywords: Jurisdictions; Wealth-stratification; Disasters; Local public goods (search for similar items in EconPapers)
JEL-codes: H71 H73 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046220302775
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:85:y:2020:i:c:s0166046220302775

DOI: 10.1016/j.regsciurbeco.2020.103592

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().