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Interjurisdictional Sorting and Majority Rule: An Empirical Analysis

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Author Info
Dennis Epple
Thomas Romer
Holger Sieg
Abstract

The goal of this paper is to provide a comprehensive empirical analysis of majority rule and Tiebout sorting within a system of local jurisdictions. The idea behind the estimation procedure is to investigate whether observed levels of public expenditures satisfy necessary conditions implied by majority rule in a general equilibrium model of residential choice. The estimator controls for observed and unobserved heterogeneity among households, observed and unobserved characteristics of communities, and the potential endogeneity of prices and expenditures, as well as the self-selection of households into communities of their choice. We estimate the structural parameters of the model using data from the Boston Metropolitan Area. The empirical findings reject myopic voting models. More sophisticated voting models based on utility-taking provide a potential explanation of the main empirical regularities. Copyright The Econometric Society.

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Publisher Info
Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 69 (2001)
Issue (Month): 6 (November)
Pages: 1437-1465
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Handle: RePEc:ecm:emetrp:v:69:y:2001:i:6:p:1437-1465

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  1. David M. Brasington & Andres Jauregui & Diane Hite, 2009. "House Price Impacts of Racial, Income, Education, and Age Neighborhood Spatial Concentration," University of Cincinnati, Economics Working Papers Series 2009-05, University of Cincinnati, Department of Economics. [Downloadable!]
  2. Tatom, John, 2006. "Are High Taxes Restricting Indiana’s Growth?," MPRA Paper 17825, University Library of Munich, Germany. [Downloadable!]
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  3. Kurt Schmidheiny, 2003. "Income Segregation and Local Progressive Taxation: Empirical Evidence from Switzerland," Diskussionsschriften dp0311, Universitaet Bern, Departement Volkswirtschaft. [Downloadable!]
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  4. Eric J. Brunner & Jennifer Imazeki, 2006. "Tiebout Choice and the Voucher," Working papers 2006-10, University of Connecticut, Department of Economics. [Downloadable!]
  5. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September. [Downloadable!]
  7. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics, revised Jan 2009. [Downloadable!]
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  8. Calabrese, Stephen & Epple, Dennis & Romer, Thomas & Sieg, Holger, 2005. "Local Public Good Provision: Voting, Peer Effects, and Mobility," Papers 10-04-2005, Princeton University, Research Program in Political Economy. [Downloadable!]
  9. Huffman, Sonya Kostova & Kilkenny, Maureen, 2003. "Regional Welfare Programs and Labor Force Participation," Staff General Research Papers 10364, Iowa State University, Department of Economics. [Downloadable!]
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  10. Yannis M Ioannides & Jeffrey E Zabel, 2002. "Interactions, Neighborhood Selection, and Housing Demand," Working Papers 02-19, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  11. John Yinger, 2009. "Hedonic Markets and Explicit Demands: Bid-Function Envelopes for Public Services, Neighborhood Amenities, and Commuting Costs," Center for Policy Research Working Papers 114, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  12. Markus Haavio & Heikki Kauppi, 2009. "House Price Fluctuations and Residential Sorting," Discussion Papers 48, Aboa Centre for Economics. [Downloadable!]
  13. Stephen Calabrese & Dennis Epple & Thomas Romer & Holger Sieg, 2005. "Local Public Good Provision: Voting, Peer Effects, and Mobility," NBER Working Papers 11720, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Alejandro Saporiti, 2007. "Strategy-Proofness and Single-Crossing," Wallis Working Papers WP48, University of Rochester - Wallis Institute of Political Economy. [Downloadable!]
  15. Kurt Schmidheiny, 2002. "Income Stratifcation in Multi-Community Models," Diskussionsschriften dp0215, Universitaet Bern, Departement Volkswirtschaft. [Downloadable!]
  16. Haavio, Markus & Kauppi, Heikki, 2009. "House price fluctuations and residential sorting," Research Discussion Papers 14/2009, Bank of Finland. [Downloadable!]
  17. Eric Brunner & Jennifer Imazeki & Stephen L. Ross, 2006. "Universal Vouchers and Racial Segregation," Working papers 2006-01, University of Connecticut, Department of Economics, revised Aug 2008. [Downloadable!]
  18. Patrick Bayer & Robert McMillan & Kim Rueben, 2005. "Residential Segregation in General Equilibrium," NBER Working Papers 11095, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2004. "Tiebout Sorting, Social Multipliers and the Demand for School Quality," NBER Working Papers 10871, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "An Equilibrium Model of Sorting in an Urban Housing Market," NBER Working Papers 10865, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Jesse Rothstein, 2004. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Effects of Inter-district Competition," NBER Working Papers 10666, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Alejandro Saporiti, 2008. "Strategy-Proofness and Single-Crossing," Wallis Working Papers WP55, University of Rochester - Wallis Institute of Political Economy. [Downloadable!]
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  23. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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