Does endogenous formation of jurisdictions lead to wealth-stratification?

Gravel, Nicolás; Thoron, Sylvie

doi:10.1016/j.jet.2005.08.002

Cited by 25 publications

(28 citation statements)

References 15 publications

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“…As in Gravel and Thoron (2007), this condition is equivalent to the monotonicity of the preferred tax rate function with respect to the private wealth, for any given amount of the other arguments. To prove this equivalence, let first etablish the following lemma.…”

Section: Resultsmentioning

confidence: 99%

“…We consider a model a la Gravel and Thoron (2007), improved by the presence of a competitive land market, spillovers and congestion. There is a continuum of house-holds on the interval [0; 1] with Lebesgue measure λ, where, for any subset I ⊂ [0; 1], the mass of household in I is given by λ(I).…”

Section: The Formal Modelmentioning

confidence: 99%

“…Unfortunately, one of these sufficient conditions was the absence of spillovers between jurisditions, which is a pretty strong assumption, that might not be necessary. Gravel and Thoron (2007) identified a condition that ensure the segregation, in Westhoff's sense, of any stable jurisdiction structure : the public good must be, for all level of prices and income, either always a complement or a substitute to the private good. This condition is identified as the Gross Subtitutability/Complementarity (GSC) condition.…”

Section: Introductionmentioning

confidence: 99%

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The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation

Oddou

2011

SSRN Journal

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SummaryThis paper analyzes the effect of spillovers and congestion of local public goods on the segregative properties of endogenous formation of jurisdiction. Households living in the same place form a jurisdiction and produce a local public good, that creates positive spillovers in other jurisdictions and suffers from congestion. In every jurisdiction, the production of the local public good is financed through a local tax on household's wealth. Local wealth tax rates are democratically determined in all jurisdictions. Households also consume housing in their jurisdiction. Any household is free to leave its jurisdiction for another one that would increase its utility. A necessary and sufficient condition to have every stable jurisdiction structure segregated by wealth, for a large class of congestion measure and any spillovers coefficient structure, is identified: the public good must be a gross substitute or a gross complement to the private good and the housing. The effect of spillovers and congestion on the segregative properties of endogenous jurisdiction structure formation * Rémy Oddou † Keywords March 5, 2011Abstract This paper analyzes the effect of spillovers and congestion of local public goods on the segregative properties of endogenous formation of jurisdiction. Households living in the same place form a jurisdiction and produce a local public good, that creates positive spillovers in other jurisdictions and suffers from congestion. In every jurisdiction, the production of the local public good is financed through a local tax on household's wealth. Local wealth tax rates are democratically determined in all jurisdictions. Households also consume housing in their jurisdiction. Any household is free to leave its jurisdiction for another one that would increase its utility. A necessary and sufficient condition to have every stable jurisdiction structure segregated by wealth, for a large class of congestion measure and any spillovers coefficient structure, is identified: the public good must be a gross substitute or a gross complement to the private good and the housing.

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Section: Resultsmentioning

confidence: 99%

Section: The Formal Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation

Oddou

2011

SSRN Journal

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“…An economy is composed of six elements. The first element, which is the main difference from Gravel and Thoron's () article, is a discrete set of households

N \subset N

, where

c a r d (N) = n \in N

.…”

Section: The Formal Modelmentioning

confidence: 99%

“…Gravel and Thoron () identified a necessary and sufficient condition that ensures the segregation of every stable jurisdiction structure: the public good must, for all levels of prices and wealth, either always be a complement or a substitute to the private good. This condition is called the gross substitutability/complementarity (GSC) condition.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Spillovers and Congestion on the Endogenous Formation of Jurisdictions

Oddou¹

2016

J Public Economic Theory

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This paper analyzes the effect of interjurisdictional spillovers and congestion of local public services on the segregative properties of endogenous formation of jurisdictions. Households choosing to live at the same place form a jurisdiction which produces congested local public services, which generates positive spillovers to other jurisdictions. In every jurisdiction, the production of the local public services is financed through a local tax based on households' wealth. Local wealth tax rates are democratically determined in every jurisdiction. Households consume the available amount of public services in their jurisdiction and a composite private good. Any household is free to leave its jurisdiction for another that would increase its utility. A necessary and sufficient condition to have every stable jurisdiction structure segregated by wealth is identified: the public services must be either a gross substitute or a gross complement to the private good.

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Networks and Stability

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Wooders

2009

Encyclopedia of Complexity and Systems Science

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Does endogenous formation of jurisdictions lead to wealth-stratification?

Cited by 25 publications

References 15 publications

The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation

The Effect of Spillovers and Congestion on the Segregative Properties of Endogenous Jurisdiction Structure Formation

The Effect of Spillovers and Congestion on the Endogenous Formation of Jurisdictions

Networks and Stability

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