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Title: On the Strategic Community Development

Author(s): Vernon Henderson and Jacques-François Thisse

Publication Date: January 1997

Keyword(s): Land development, Strategic pricing, Tax Competition and Tiebout Model

Programme Area(s): Industrial Organization

Abstract: This paper examines strategic behaviour 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 behaviours. In low-income communities housing consumption is subsidized once lots are priced. In high-income communities housing consumption is generally taxed.

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Bibliographic Reference

Henderson, V and Thisse, J. 1997. 'On the Strategic Community Development'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1550