Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235278 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 8908
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This paper proposes a novel approach to evaluate location decisions for public facilities. The approach addresses, not only the standard distance-minimizing problem, but also the endogenous location decisions of individuals. To do so, I develop a quantifiable general equilibrium model with endogenous (residential and commercial) densities, housing prices, commutes to work and public facilities, as well as public facility characteristics. The latter includes a facility’s location, quality, district and capacity. I apply the framework to secondary schools in Paris’ greater region at a 1km2 geographical scale. The analysis reveals that the observed location decisions made between 2001 and 2015 underestimate the endogenous reaction of individuals. A more decentralized strategy is predicted to increase welfare growth by 10 percentage points on average, mostly via shorter commutes and lower housing prices.
Subjects: 
location
facility
general equilibrium
commuting
interrupted search
JEL: 
R53
H11
R12
Document Type: 
Working Paper
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