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Fiscal independence, spillovers, and residential choice

  • Population and Residential Location
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Papers of the Regional Science Association

Abstract

Based on some empirical facts about the Swiss system of cities, this paper offers a model for agglomerations consisting of several fiscally independent communities. Every community provides its residents with local public goods produced at U-shaped average cost curves. In addition, central cities supply their surrounding agglomerations with pure public goods and services. Due to fiscal inequivalence, suburban communities obtain a free ride from the central city. Within such a model, increased spending by central cities is shown to be the only cause for the observed flattening of density gradients.

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Authors and Affiliations

  1. Department of Economics, University of Bonn, Adenauerallee 24, D-5300, Bonn 1, West Germany

    Urs Schweizer

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  1. Urs Schweizer
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Schweizer, U. Fiscal independence, spillovers, and residential choice. Papers of the Regional Science Association 56, 59–69 (1985). https://doi.org/10.1007/BF01887903

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  • DOI: https://doi.org/10.1007/BF01887903

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