On the Strategic Community Development
CEPR Discussion Paper Series No. 1550
Posted: 18 Mar 1997
Date Written: January 1997
This paper examines strategic behavior of developers who, through offering different public good packages and revenue/fiscal schemes, compete for residents who are differentiated by income. There is an endogenous determination of numbers and sizes of communities. Developers have an incentive to strongly differentiate their public good offerings. In terms of pricing strategies, developers exhibit sharply contrasting behaviors. In low-income communities housing consumption is subsidized once lots are priced. In high-income communities housing consumption is generally taxed.
JEL Classification: H7, L13, R51
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