Using Utilitarian and Rawlsian Policies to Attract the Creative Class: A Tale of Two Cities

Batabyal, Amitrajeet and Yoo, Seung Jick (2020): Using Utilitarian and Rawlsian Policies to Attract the Creative Class: A Tale of Two Cities.

Abstract

Consider an aggregate economy of two cities. We study the impact that the use of utilitarian and Rawlsian policies by these two cities has on their ability to attract members of the so called creative class. We first focus on the case in which both cities adopt utilitarian policies. Second, we analyze the case where both cities implement Rawlsian policies. Third, we study the case where one city uses a Rawlsian policy but the other city pursues a utilitarian policy. Fourth, we compare the policy outcomes in the first and the third cases above and show that if one city switches to a Rawlsian or more egalitarian objective when the other city remains utilitarian, the aggregate economy becomes less egalitarian. Finally, we compare the second and the third cases above and demonstrate that if one city switches to a Rawlsian or more egalitarian objective when the other city remains Rawlsian, the aggregate economy becomes more egalitarian.

• Item Type: MPRA Paper
• Language: English
• Keywords: City, Creative Class, Egalitarian, Rawlsian, Utilitarian
• Subjects: D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

References

Audretsch, D.B., and Belitski, M. 2013. The missing pillar: The creativity theory of knowledge spillover entrepreneurship, Small Business Economics, 41, 819-836.

Batabyal, A.A., and Nijkamp, P. 2016. Creative capital production, inefficiency, and inequality, International Review of Economics and Finance, 45, 553-558.

Batabyal, A.A., and Beladi, H. 2018. Artists, engineers, and aspects of economic growth in a creative region, Economic Modelling, 71, 214-219.

Batabyal, A.A., Kourtit, K., and Nijkamp, P. 2019. Using local public goods to attract and retain the creative class: A tale of two cities, Regional Science Policy and Practice, 11, 571-581.

Buettner, T., and Janeba, E. 2016. City competition for the creative class, Journal of Cultural Economics, 40, 413-451.

Caplin, A., and Nalebuff, B. 1992. Individuals and institutions, American Economic Review Papers and Proceedings, 82, 317-322.

Donegan, M., and Lowe, N. 2008. Inequality in the creative city: Is there still a place for ‘old fashioned’ institutions? Economic Development Quarterly, 22, 46-62.

Fehr, E., and Gachter, S. 2000. Fairness and retaliation: The economics of reciprocity, Journal of Economic Perspectives, 14, 159-181.

Firey, W. 1945. Sentiment and Symbolism as Ecological Variables. Bobbs-Merrill, Indianapolis, IN.

Florida, R. 2002. The Rise of the Creative Class. Basic Books, New York, NY.

Florida, R. 2003. Cities and the creative class, City and Community, 2, 3-19.

Florida, R. 2005. The Flight of the Creative Class. Harper Business, New York, NY.

Florida, R. 2008. Who’s Your City? Basic Books, New York, NY.

Florida, R. 2014. The creative class and economic development, Economic Development Quarterly, 28, 196-205.

Florida, R., and King, K.M. 2016. Venture Capital Goes Urban. Martin Prosperity Institute Report, University of Toronto, Toronto, Canada.

Forbes, C., Evans, M., Hastings, N., and Peacock, B. 2011. Statistical Distributions, 4th edition. Wiley, Hoboken, NJ.

Hotelling, H. 1929. Stability in competition, Economic Journal, 39, 41-57.

Peck, J. 2005. Struggling with the creative class, International Journal of Urban and Regional Research, 29, 740-770.

Reese, L.A., and Sands, G. 2008. Creative class and economic prosperity: Old nostrums, better packaging? Economic Development Quarterly, 22, 3-7.