Keeping People Out: Income Distribution, Zoning, and the Quality of Public Education.

The authors examine the effect of community zoning regulations on allocations and welfare in a two-community model. Individuals choose in which community to live and each community levies a tax, chosen via majority vote, on local property to finance local public education. The authors study both exogenously specified and endogenously chosen zoning regulations. In equilibrium, the two communities are stratified by income. Theoretical analysis indicates that a number of outcomes are possible. Several interesting results emerge: zoning tends to make the richer community more exclusive but the gap between education expenditures may decrease. Moreover, welfare effects are not monotone in income. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.