Sometimes Close is Good Enough: The Value of Nearby Environmental Amenities

An extensive empirical literature exists showing that variations in region-specific amenities can account for persistent differences in real wages across regions. However, this literature has considered only amenities in the same location as the household. This paper argues that environmental amenities at some distance from but accessible to urban areas may lead to negative compensating wage differentials. We use a general equilibrium framework and data from the 1995 Current Population Survey to calculate implicit amenity prices based on measures of distance to environmental amenities. Our results suggest that amenities outside the metropolitan area do generate compensating wage differentials, as workers are willing to accept lower wages to live in accessible proximity to “nice” places. This implies that these places provide a positive externality to those communities that find them accessible. The estimated effects are quantitatively important, suggesting that these externalities should be taken into account in policy making.

America's North Coast: A Benefit-Cost Analysis of a Program to Protect and Restore the Great Lakes

Examines the baseline ecological conditions of the Great Lakes and offers a plan for the area's environmental protection and restoration. Demonstrates how a restoration program can provide economic benefits that substantially exceed its costs

International Trade with Lumpy Countries

This paper explores the implications for the pattern of international trade of various differences among regions within countries--what we call llumpiness. It is shown first that if factors of production are immobile among regions, and if they are sufficiently unevenly distributed across these regions, then the pattern of trade of the country as a whole may depart from what it would have been had factors been perfectly mobile. Thus lumpiness in the geographical distribution of factors can be a determinant of trade. Second, the regional distribution of factors is made endogenous by assuming instead that they are mobile, but that differences now exist among regions in the levels of amenities that either attract labor or assist production. We show that such differences in amenities can cause the endogenous distribution of factors to be sufficiently uneven so as to influence trade. Thus lumpiness of amenities can be a determinant of trade. Finally, we introduce nontraded goods, which turn out also to influence trade. Thus lumpiness in the provision of nontraded goods is a determinant of trade.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100667/1/ECON140.pd

On the Likelihood of Factor Price Equalization with Nontraded Goods

It is argued that nontraded goods reduce the likelihood of Factor Price Equalization (FPE). Specifically, the addition of nontraded goods to a small-open-economy Heckscher-Ohlin model with any number of goods reduces the size of the cone of diversification by the fraction of income spent on nontraded goods. This in turn may be regarded as reducing by a comparable amount the likelihood that a country's factor endowments will lie within that cone, and thus the likelihood of FPE.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100683/1/ECON155.pd

What Do Tax Limitation Votes Mean?

In response to the tax limitation movement which received national attention with the passage of California\u27s Proposition 13 and which gave rise to a slate of tax limitation referends on the Michigan ballot in 1978, we began a theoretical and empirical study of the relationship between the size of state and local governing units and issues in public finance

On the effects of federal capital taxation on growing and declining areas

It has often been claimed that measures designed to stimulate capital formation at the national level will accelerate the decline of regions that are not growing. A number of simple models are employed to evaluate this claim, and it is found that the effect of national subsidies is ambiguous. Further, it is shown that on average the form of capital stimulus used in the Economic Recovery Tax Act of 1981 will tend to help higher-tax regions, which tend to be those that have experienced relative economic declines in recent years.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/25119/1/0000552.pd

Racial prejudice in a search model of the urban housing market

A simple model of buyer search in an urban housing market is employed to demonstrate that if some whites are unwilling to sell housing to blacks competitive equilibria in which blacks pay more for housing than whites are sustainable. The model is also used to consider a number of issues in the literature on housing discrimination. Most important, it is shown that in equilibrium the housing market will be racially segmented under a wide variety of conditions.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/22581/1/0000129.pd

A general equilibrium model of heterogeneous local property taxes

A formal model of an economy consisting of many production centres, each of which levies property taxes at a different rate, is developed and analyzed. In the context of the model, it is shown that holders of capital may have either a positive or negative willingness to pay for a heterogenous system of taxes relative to a uniform tax which raises the same revenue. Particular emphasis is placed on interpretation of the `new view' of the property tax in light of this and other results which derive from the model.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/22793/1/0000349.pd