Fiscal inequivalence, incentive equivalence and Pareto efficiency in a decentralized urban context

Article Abstract:

The introduction of head and land taxes into a decentralized urban context results in fiscal inequivalence that results in a Pareto inefficient equilibrium different from that of laissez-faire. In a model characterized by identical individuals, costless migration between a center and a suburb and land ownership ranging from rent sharing to absentee landlordism, local governments use such taxes to prevent resource outflows from their jurisdictions and redistribute such revenues to their residents. Areas with high per head revenues become overpopulated, and interjurisdictional transfers are then required to equalize these subsidies. Free mobility compels local government cooperation, thereby making the resulting Nash equilibrium Pareto efficient and superior to that of laissez-faire.

Research, Cities and towns, Urban economics

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The exponential density function: first principles, comparative statistics, and empirical evidence

Article Abstract:

An investigation of how unitary housing price elasticity can develop from first principles is presented which allows the identification of the determinants of the density gradiant. Existing comparative statics are used with the determinants to analyze the connection between the some exogenous variable and the density gradiant. Research results receive support from existing empirical evidence.

Analysis, Housing, Housing research

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