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Using Local Public Goods to Attract and Retain the Creative Class: A Tale of Two Cities

Amitrajeet Batabyal (), Karima Kourtit and Peter Nijkamp

MPRA Paper from University Library of Munich, Germany

Abstract: We study the impact that the provision of a local public good (LPG) by two cities has on their ability to attract and retain members of the creative class. This creative class consists of two types of members known as engineers and artists. Engineers are wealthier than artists and they also value the LPG more. We first focus on each city in isolation. We compute the marginal value and the marginal cost of the LPG and then determine the provision of this LPG when the provision is determined by uniform contributions and majority voting. Next, we allow the creative class members to migrate between the two cities and analyze whether engineers or artists migrate, the equilibrium distribution of the creative class, and the efficiency of the LPG provision. Finally, we consider the situation in each city just before migration and study how much of the LPG is provided when proportional contributions and majority voting determine this provision. A related question we address is whether engineers or artists now have an incentive to migrate and, if yes, we identify who would like to migrate and to which city.

Keywords: Artist; Creative Class; Engineer; Local Public Good; Majority Voting (search for similar items in EconPapers)
JEL-codes: H40 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-cul, nep-geo and nep-ure
Date: 2019-03-07, Revised 2019-05-23
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Journal Article: Using local public goods to attract and retain the creative class: A tale of two cities (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94119

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