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Do People Vote with Their Feet? An Empirical Test of Tiebout

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  • H. Spencer Banzhaf
  • Randall P. Walsh

Abstract

Charles Tiebout's suggestion that people "vote with their feet" for communities with optimal bundles of taxes and public goods has played a central role in local public finance for over 50 years. Using a locational equilibrium model, we derive formal tests of his premise. The model predicts increased population density in neighborhoods experiencing exogenous improvements in public goods and, for large improvements, increased relative mean incomes. We test these hypotheses in the context of changing air quality. Our results provide strong empirical support for the notion that households "vote with their feet" for environmental quality.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.3.843
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File URL: http://www.aeaweb.org/aer/data/june08/20060190_data.zip
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 98 (2008)
Issue (Month): 3 (June)
Pages: 843-63

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Handle: RePEc:aea:aecrev:v:98:y:2008:i:3:p:843-63

Note: DOI: 10.1257/aer.98.3.843
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Voting with your feet
    by Economic Logician in Economic Logic on 2008-09-26 14:17:00
  2. ¿Vota la gente con los pies?
    by Adrián Ravier in Punto de Vista Economico on 2012-07-08 15:21:08
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