Standard explanations for the income heterogeneity within neighborhoods rely on differences of preferences across households and heterogeneity of the housing stock. We propose an alternative and complementary explanation. We construct a stochastic equilibrium sorting model where (1) income is...

Income inequality can be measured at different levels of aggregation such as global, continental, international and national levels. Here we consider income inequality at the national level but the focus is on the within country regional inequality. Regional inequality in income distribution in...