Abstract
We provide a competitive equilibrium theory of urban segregation in a linear city. Households demand consumption and housing along the city and are exposed to neighborhood externalities. We show that equilibria that are robust to small coalitional deviations are segregated. Our results explain urban segregation in a standard neoclassical framework and shed new light on the difficulties faced by authorities to integrate cities.
Original language | English |
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Pages (from-to) | 653-678 |
Number of pages | 26 |
Journal | Journal of Public Economic Theory |
Volume | 25 |
Issue number | 4 |
DOIs | |
State | Published - Aug 2023 |
Externally published | Yes |
Keywords
- homophily
- residential segregation
- spatial externalities