Welfarism and segregation in endogenous jurisdiction formation models
No 2017-43, EconomiX Working Papers from University of Paris Nanterre, EconomiX
This paper analyses how welfarism affects the segregative properties of endogenous jurisdiction formation, in a model where local jurisdictions produce a local public good and distribute an allowance to their households, both financed by a proportional tax based on the households' wealth. A jurisdiction is composed of all the households that live in the same place. Local wealth tax rates and the level of the allowance are determined to maximize a social welfare function. Households can "vote with their feet", which means that they can choose to move to the jurisdiction that offers the package "tax rate - amount of public good - allowance" that provides the highest utility level. The main result of this article is the proof that the maximin criterium is more segregative than the utilitarian one.
Keywords: Jurisdiction; Segregation; Welfare (search for similar items in EconPapers)
JEL-codes: C78 (search for similar items in EconPapers)
Pages: 13 pages
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-gth and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2017-43
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