Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
983704 | Regional Science and Urban Economics | 2006 | 23 Pages |
Abstract
We develop an urban model in which all jobs are located in the Central Business District (CBD) and workers, who have high relocation costs, optimally choose their residence between the CBD and the city fringe. We consider two information structures. In the first case, firms perfectly observe the residential location of all workers, while, in the second one, firms do not observe where workers live. In the perfect information equilibrium, we show that the efficiency wage is increasing with distance to jobs. We also demonstrate that workers are better off and landlords worse off under the perfect information equilibrium.
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Authors
Yves Zenou,