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Travelling for public goods, neighborhood effect and spatial stratification

Author

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  • Yang, Xiaozhong
  • Zhang, Cheng
Abstract
To investigate the spatial stratification of people with heterogeneous incomes, this paper incorporates travelling for public goods and the market friction arising from the minimum area when buying houses into a monocentric model, finding two stratification patterns: mixed stratification wherein people with high and low incomes live in suburbs while middle-income people live in urban areas, and complete stratification in which the wealthy live in urban areas and the poor live in suburbs. When public goods have congestion effect or when the agglomeration effect is small, there is mixed stratification; when the agglomeration effect of public services is large, there is complete stratification. Under mixed stratification, the increase in land supply in the suburbs causes low-income people to move to urban area, while lower commuting costs for suburban residents or increased public services in urban areas causes low-income people to migrate to urban areas. If travelling for public goods is impossible, these policies cause low-income residents to move from urban areas to suburbs.

Suggested Citation

  • Yang, Xiaozhong & Zhang, Cheng, 2023. "Travelling for public goods, neighborhood effect and spatial stratification," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 128-139.
    • Handle: RePEc:eee:reveco:v:84:y:2023:i:c:p:128-139
    DOI: 10.1016/j.iref.2022.11.011
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    More about this item

    Keywords

    Spatial stratification; Travelling for public goods; Neighborhood effect; Market friction; Monocentric model;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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