Who's in Charge of the Inner City? The Conflict between Efficiency and Equity in the Design of a Metropolitan Area

University of Colorado Working Paper Series

42 Pages Posted: 4 Feb 2003

See all articles by Charles De Bartolome

Charles De Bartolome

University of Colorado at Boulder - Department of Economics

Stephen L. Ross

University of Connecticut - Department of Economics

Date Written: August 2002

Abstract

A circular metropolitan area consists of an inner city and a suburb. Households sort over the two jurisdictions based on public service levels and their costs of commuting to the metropolitan center. Using numerical simulations, we show (1) there typically exist two equilibria: One in which the poor form the voting majority in the inner city and the other in which the rich form the majority in the inner city; (2) there is an efficiency v. equity trade-off as to which equilibrium is preferred; and (3) if the inner city contains only poor households, equity favors expanding the inner city to include rich households.

Keywords: urban, equilibria, poor, welfare

JEL Classification: H73, R12, R14

Suggested Citation

De Bartolome, Charles A. M. and Ross, Stephen L., Who's in Charge of the Inner City? The Conflict between Efficiency and Equity in the Design of a Metropolitan Area (August 2002). University of Colorado Working Paper Series, Available at SSRN: https://ssrn.com/abstract=340381 or http://dx.doi.org/10.2139/ssrn.340381

Charles A. M. De Bartolome (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309-0256
United States
303-492-4464 (Phone)
303-492-8960 (Fax)

Stephen L. Ross

University of Connecticut - Department of Economics ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States
860-486-3533 (Phone)
860-486-4463 (Fax)

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