Placing the poor while keeping the rich in their place

Jonathan P. Caulkins, Dieter Grass, Michael Johnson, Gernot Tragler, Yuri Yegorov and Gustav Feichtinger
Additional contact information
Jonathan P. Caulkins: Carnegie Mellon University
Dieter Grass: Technische Universität Wien
Michael Johnson: Carnegie Mellon University
Gernot Tragler: Technische Universität Wien

Demographic Research, 2005, vol. 13, issue 1, 1-34

Abstract: A central objective of modern US housing policy is deconcentrating poverty through "housing mobility programs" that move poor families into middle class neighborhoods. Pursuing these policies too aggressively risks inducing middle class flight, but being too cautious squanders the opportunity to help more poor families. This paper presents a stylized dynamicoptimization model that captures this tension. With base-caseparameter values, cost considerations limit mobility programs before flight becomes excessive. However, for modest departures reflecting stronger flight tendencies and/or weaker destination neighborhoods, other outcomes emerge. In particular, we find state-dependence and multiple equilibria, including both de-populated and oversized outcomes. For certain sets of parameters there exists a Skiba point that separates initial conditions for which the optimal strategy leads to substantial flight and depopulation from those for which the optimal strategy retains or even expands the middle class population. These results suggest the value of estimating middle-class neighborhoods' "carrying capacity" for absorbing mobility program placements and further modeling of dynamic response.

Keywords: separation; housing policy; negative externality; segregation; optimal control; Skiba point; multiple equilibria (search for similar items in EconPapers)
JEL-codes: J1 Z0 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.demographic-research.org/volumes/vol13/1/13-1.pdf (application/pdf)

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:dem:demres:v:13:y:2005:i:1

DOI: 10.4054/DemRes.2005.13.1

Access Statistics for this article

More articles in Demographic Research from Max Planck Institute for Demographic Research, Rostock, Germany
Bibliographic data for series maintained by Editorial Office ().