Sorting by foot: `travel-for' local public goods and equilibrium stratification

Shin-Kun Peng () and Ping Wang

Canadian Journal of Economics, 2005, vol. 38, issue 4, 1224-1252

Abstract: We re-examine Tiebout's hypothesis of endogenous sorting in a competitive spatial equilibrium framework, by considering both income and preference heterogeneity and by allowing agents to decide endogenously the number of visits to a `travel-for' local public good. The equilibrium configuration may be completely segregated, incompletely segregated, or completely integrated, depending on relative market rents and income-preference-local tax parameters. A segregated equilibrium may feature endogenous sorting purely by income or by both income and preferences. While the rich need not be closer to the local public facility site, multiple equilibria may arise when the equilibrium configuration is incompletely segregated.

JEL-codes: D50 H41 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (13)

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