Agglomeration and Welfare with Heterogeneous Preferences

Fabien Candau, Marc Fleurbaey

Research output: Contribution to journalArticle

1 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)685-708
Number of pages24
JournalOpen Economies Review
Volume22
Issue number4
DOIs
StatePublished - Sep 1 2011
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Keywords

  • F12
  • I3
  • R13

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