Inter-city competition for heterogeneous creative class members using tax policy

Umana Huq () and Amitrajeet Batabyal
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Umana Huq: Rochester Institute of Technology

Economics Bulletin, 2024, vol. 44, issue 4, 1348 - 1355

Abstract: We analyze inter-city competition between two cities A and B that use taxes to attract heterogeneous members of the creative class. There are three types of creative class members and each type represents a particular occupation. Irrespective of type or occupation, creative class members value local public goods and each city levies a tax to drawn in as many members of the creative class as possible by providing an apposite local public good. In this setting, we accomplish two tasks. First, we describe the equilibrium allocation, i.e., a tax rate for each city and an allocation of creative class members to the two cities. Second, we compare and contrast this equilibrium allocation with the Pareto efficient allocation.

Keywords: Creative Class; Heterogeneity; Inter-City Competition; Pareto Efficiency; Tax (search for similar items in EconPapers)
JEL-codes: H2 R2 (search for similar items in EconPapers)
Date: 2024-12-30
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Working Paper: Inter-City Competition for Heterogeneous Creative Class Members Using Tax Policy (2024)
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