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The Annals of Regional Science
Erschienen in: The Annals of Regional Science 1/2006

01.03.2006 | Original Paper

Labor and household mobility: efficiency and equilibrium

verfasst von: Matthias Wrede

Erschienen in: The Annals of Regional Science | Ausgabe 1/2006

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Abstract

This paper considers the allocation of resources when people choose separately their residence and the place of work. The purpose of the paper is threefold. First, it derives necessary conditions for an efficient distribution of workers and residents. Second, besides efficient allocations market equilibria are discussed. Third, the paper also develops a spatial model with local public goods and discusses within the framework the impact of local public goods on the distribution of people and vice versa.
Vorheriger Artikel Local labor markets in U.S.–Mexican border cities and the impact of maquiladora production
Nächster Artikel Testing the credit view with pooled data: dynamic links among state bank health, investment-oriented bank loans, and economic performance

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Fußnoten
1
Derivatives are denoted by subscripts.
 
2
Linearity is assumed for convenience. The general results also hold with non-linear commuting technologies.
 
3
No particular transportation costs for the consumption good are considered. This can be justified by assuming that transportation costs for consumption goods are relatively low and/or that workers pick up consumption goods at the city after work.
 
4
If the mobility equilibrium condition were not considered as a constraint, the set of efficient allocations would be different and an utilitarian planner would treat equals unequally provided that the income elasticity of demand for space is non-zero (see Mirrlees 1972; Wildasin 1986).
 
5
F j i is used as an abbreviation for F j (N i ,L i ) with i=A, B and j=N, L.
 
6
Since it has been assumed that the marginal product of labor approaches infinity when labor approaches zero, a corner solution with respect to the working population does not exist.
 
7
A dot indicates a derivative with respect to space.
 
8
The public good supplier in city A (B) is indicated by the lower case letter a (b).
 
9
See, among many others, Myers (1990), Krelove (1992), Epple and Zelenitz (1981).
 
10
The prime indicates the derivative.
 
11
It is well know that the equilibrium in the monocentric city is efficient (see Fujita 1989, pp. 71-75).
 
12
This is clearly not the first model on local public good supply and taxation which separates the place of residents and the place of work. E.g., Braid (2000) has discussed tax competition in a spatial model with commuting. But in contrast to this paper he assumes an exogenous population density.
 
13
It is well known from the public finance literature on this subject that (production and) utilization of resources should differ across regions at efficient equal utility allocations if regions have different characteristics (see particularly Krelove 1992).
 
Literatur
Alonso W (1964) Location and land use. Harvard University Press, Cambridge, Massachusetts
Arnott R, Stiglitz JE (1979) Aggregate land rent, expenditure on public goods, and the optimal city size. Q J Econ 93:471–500CrossRef
Braid, RM (2000) A spatial model of tax competition with multiple tax instruments. J Urban Econ 47:88–114CrossRef
Epple D, Zelenitz A (1981) The implications of competition among jurisdictions: does tiebout need politics? J Polit Econ 89:1197–1217CrossRef
Fujita M (1989) Urban economic theory. Land use and city size. Cambridge University Press, Cambridge, UK
Fujita M, Thisse J-F (2002) Economics of agglomeration. Cambridge University Press, Cambridge, UK
Hochman O, Pines D, Thisse J-F (1995) On the optimal structure of local governments. Am Econ Rev 85:1224–1240
Mills ES (1967) An aggregative model of resource allocation in a metropolitan area. Am Econ Rev 57:197–210
Mirrlees JA (1972) The optimum town. Scand J Econ 74:114–135
Muth R (1969) Cities and housing. University of Chicago Press, Chicago
Myers G (1990) Optimality, free mobility, and the regional authority in a federation. J Public Econ 43:107–121CrossRef
Starrett D (1988) Foundations of public economics. Cambridge University Press, Cambridge, UK
Thisse J-F, Wildasin D (1992) Public facility location and urban structure: equilibrium and welfare. J Public Econ 48:83–118CrossRef
von Thünen JH (1966) Der isolierte Staat in Beziehung auf Landwirtschaft und Nationalökonomie. Gustav Fischer, Jena
Wellisch D (2000) Theory of public finance in a federal state. Cambridge University Press, Cambridge, UK
Wildasin, DE (1986) Spatial variation of the marginal utility of income and unequal treatment of equals. J Urban Econ 19:125–129CrossRef
Wrede M (2003) Tax deductibility of commuting expenses and residential land use with more than one center. CESifo Working Papers 972
Metadaten
Titel
Labor and household mobility: efficiency and equilibrium
verfasst von
Matthias Wrede
Publikationsdatum
01.03.2006
Verlag
Springer-Verlag
Erschienen in
The Annals of Regional Science / Ausgabe 1/2006
Print ISSN: 0570-1864
Elektronische ISSN: 1432-0592
DOI
https://doi.org/10.1007/s00168-005-0023-9

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