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NeighborhoodChoice
IntroductionExtendmodelofresidentialchoicebeyondcommutingcostWhydopeoplesegregatebyincome,race,education?Whataretheconsequencesofsegregation?DiversityversusSegregation8-2
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AModelofSortingforLocalPublicGoodsFragmentedsystemoflocalgovernmentprovideschoiceCitywith3voterswithdifferingdemands(WTP)forparksCostofparks=$60peracre;sharedequallybycitizenswithheadtaxCollectivechoice:Majorityrules8-5
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MajorityRuleandtheMedianVoterSeriesofbinaryelectionsWinningsizeispreferredsizeofmedianvoter8-8
FormationofHomogeneousMunicipalitiesMetroareainitiallyhas3diversemunicipalities,eachwith3citizensSortingbyparkdemandmakesallowseveryonetogetpreferredparkLoistypesformmunicipalitywithsmallparkMariantypesformmunicipalitywithmediumparkHiramtypesformmunicipalitywithlargeparkHomogeneousmunicipalitiesaccommodatediversityindemand8-9
MunicipalityFormationforTaxPurposesSofar,assumethateachcitizen/voterinamunicipalitypaysthesametaxWhatiftaxbasevariesacrosscitizens?8-10
ImplicationsofVariationinTaxBaseVariationintaxbaseincreasesnumberofcommunitiesfrom3to9RealcitiesTaxonpropertyVariationinpropertyvaluecausesmunicipalformation8-11
NeighborhoodExternalitiesExternalitiesforkidsPositiveadultrolemodelsforkidsClassmatesinschool:focusedvs.disruptiveAdultexternalities:Jobinformation,drugusePositiveexternalitiesincreasewithincomeandeducationlevel8-12
NeighborhoodChoice:IntroductionWhogetsthedesirableneighbors?Segregatedorintegratedneighborhoods?Sortingormixingwithrespecttoincome,age,race?Implicationsforthepriceofland?8-13
BiddingforLotsinDesirableNeighborhoodsFocusonpositiveexternalitiesthatincreasewithincomeandeducationlevelWhatisincomemixofneighborhoods--segregated,orintegrated?ModelsetupTwoneighborhoods,AandB,eachwith100lotsTwo
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