Agglomeration and welfare: the core-periphery model in the light of Bentham, Kaldor, and Rawls

Sylvie Charlot, Carl Gaigne, Frederic Robert-Nicoud and Jacques Thisse

No 2003039, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The objective of this paper is to apply different welfare approaches to the canonical model developed by Krugman, with the aim of comparing the only two possible market outcomes, i.e. agglomeration and dispersion. More precisely, we use the Pareto criterion, the compensation criteria put forward by Kaldor, as well as the utilitarian and Rawlsian welfare functions. No clear answer emerges for the following two reasons: (i) except for small range of transport cost values, there is indetermination when compensation schemes are used and (ii) the best outcome heavily depends on societal values regarding inequalities across individuals. In particular, our analysis cautions against the use of utilitarian welfare functions as a foundation for regional policy recommendations.

Keywords: agglomeration; welfare; economic geography; compensation mechanism (search for similar items in EconPapers)
JEL-codes: F12 R13 (search for similar items in EconPapers)
Date: 2003-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2003.html (text/html)

Related works:
Journal Article: Agglomeration and welfare: The core-periphery model in the light of Bentham, Kaldor, and Rawls (2006)
Working Paper: Agglomeration and welfare: the core-periphery model in the light of Bentham, Kaldor, and Rawls (2006)
Working Paper: Agglomeration and welfare: The core-periphery model in the light of Bentham, Kaldor, and Rawls (2006)
Working Paper: Agglomeration and Welfare: The Core-Periphery Model in the Light of Bentham, Kaldor and Rawls (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2003039

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().