Amenities in an urban general equilibrium model

This paper has presented a general equilibrium Tiebout-median voter model. The model was solved numerically for prices and distributions of consumers which correspond to equilibria, and the results of the numerical solution of the model were used to evaluate the HES and Yinger Propositions. That complete capitalization always occurs means that the HES Proposition is false; Yinger's Proposition is misdirected since complete capitalization occurs regardless of the presence or absence of amenities (although amenities affect the equilibrium solutions). We have argued that capitalization is never appropriately measured by price differentials in a general equilibrium model.