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EQUILIBRIUM AND THE CORE IN ALONSO'S DISCRETE POPULATION MODEL OF LAND USE *
Author(s) -
Berliant Marcus,
Raa Thijs ten
Publication year - 2007
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2007.00424.x
Subject(s) - core (optical fiber) , economics , distribution (mathematics) , government (linguistics) , value (mathematics) , land tenure , population , competitive equilibrium , natural resource economics , microeconomics , land use , agriculture , agricultural economics , geography , mathematics , statistics , mathematical analysis , linguistics , philosophy , demography , archaeology , sociology , engineering , materials science , civil engineering , composite material
Conventional wisdom tells us that with no market failure and local nonsatiation of preferences, the core is at least as large as the collection of competitive equilibrium allocations. We confirm this for a standard model featuring private ownership of land. Next we consider the public land ownership version of the model. If the role of land ownership and rent distribution is assumed by a government that ploughs back rent (at least in excess of its agricultural value) to its citizens, the equilibrium allocation remains efficient, but no longer need be in the core.