(Non-)existence of equilibria in multicommunity models

This paper reconsiders equilibrium existence in models with migration and v oting over local public goods. We show that under some straightforward assu mptions on preferences and income distributions, the basic structure of mul ticommunity models (i.e,, perfect mobility, majority rule, single crossing property) implies that no equilibrium with jurisdictions conducting differe nt policies can exist. Stratification equilibria-with sorting of the popula tion according to income classes-are therefore not as natural as is sometim es suggested. Mechanisms that can serve to support stratification (i.e., ti ght housing markets, returns to scale in the provision of publicly consumed goods) are discussed. (C) 2001 Academic Press.