Skiba thresholds in a model of controlled migration

This paper presents a dynamic optimization model of a central challenge of US housing policy: deconcentrating poverty via housing mobility programs without inducing middle-class flight. We explore two versions both with and without the possibility that poor families assimilate into the middle class....

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Bibliographic Details
Published in:Journal of economic behavior & organization 2005-08, Vol.57 (4), p.490-508
Main Authors: Caulkins, Jonathan P., Feichtinger, Gustav, Johnson, Michael, Tragler, Gernot, Yegorov, Yuri
Format: Article
Language:English
Subjects:
Decentralization
Economic equilibrium
Economic models
Economic theory
Equilibrium theory
Housing
Housing policy
Mathematical economics
Middle class
Multiple equilibria
Negative externality
Optimal control
Optimization
Poverty
Segregation
Skiba point
Studies
U.S.A
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Summary:This paper presents a dynamic optimization model of a central challenge of US housing policy: deconcentrating poverty via housing mobility programs without inducing middle-class flight. We explore two versions both with and without the possibility that poor families assimilate into the middle class. Both demonstrate multiple equilibria with a Skiba point separating initial conditions for which the optimal strategy leads to substantial flight from those leading to a stronger middle-class population. We also find an interesting mathematical phenomenon of a “lens” focusing the trajectories in a sense that allows for the coexistence of three saddles and an unstable equilibrium.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2005.04.008