The Korean Economic Review
Location Differentiation of Housing Market In The Presence of A Unanimous Characteristic
Bong Ju Kim / Seung Nyeon KimYear 2007Vol. 23No. 2
This paper examines how the presence of a unanimous characteristicaffects housing locations. An example of the unanimous characteristic,considered in the paper, is the regional educational environment. Ourfindings are as follows. First, if the relative attraction of the unanimouscharacteristic is over a critical threshold, maximal differentiation no longerholds. Second, as the transportation cost is lowered, agglomeration forcesare intensified—both in social optimum and competitive outcome. Third,since allowing competitive suppliers to determine their locations results insuboptimal outcomes, the government may need to intervene with a subsidytaxscheme. However, the marginal benefit of the government interventionwould decrease with improvement in transportation system.