Agglomeration and Welfare with Heterogeneous Preferences

29 Pages Posted: 22 Apr 2009

See all articles by Fabien Candau

Fabien Candau

Université de Pau et des Pays de l'Adour

Marc Fleurbaey

Princeton University - Woodrow Wilson School of Public and International Affairs

Date Written: April 22, 2009

Abstract

This paper constructs a model of endogenous location of entrepreneurs with preference heterogeneity between individuals. Two main results are found. First, agglomeration and partial dispersion can be simultaneously stable but preference heterogeneity reduces the possibility of multiple equilibria. Secondly, measuring individual welfare in terms of equivalent income we show that in the case of agglomeration, the worst-off workers would prefer a dispersed equilibrium.

Suggested Citation

Candau, Fabien and Fleurbaey, Marc, Agglomeration and Welfare with Heterogeneous Preferences (April 22, 2009). Available at SSRN: https://ssrn.com/abstract=1393302 or http://dx.doi.org/10.2139/ssrn.1393302

Fabien Candau (Contact Author)

Université de Pau et des Pays de l'Adour ( email )

Avenue du Doyen Poplawski
64000 Pau
France

Marc Fleurbaey

Princeton University - Woodrow Wilson School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
57
Abstract Views
458
rank
372,053
PlumX Metrics