Local Residential Sorting and Public Goods Provision: A Classroom Demonstration
AbstractThis classroom exercise illustrates the Tiebout (1956) hypothesis that residential sorting across multiple jurisdictions leads to a more efficient allocation of local public goods. The exercise places students with heterogeneous preferences over a public good into a single classroom community. A simple voting mechanism determines the level of public good provision in the community. Next the classroom is divided in two, and students may choose to move between the two smaller communities, sorting themselves according to their preferences for public goods. The exercise places a cost on movement at first, then allows for costless sorting. Students have the opportunity to observe how social welfare rises through successive rounds of the exercise, as sorting becomes more complete. One may also observe how immobile individuals can become worse off because of incomplete sorting when the Tiebout assumptions do not hold perfectly.
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Bibliographic InfoPaper provided by Kenyon College, Department of Economics in its series Working Papers with number 0502.
Date of creation: Sep 2005
Date of revision:
classroom experiments; public goods; residential sorting; Tiebout hypothesis.;
Other versions of this item:
- Keith Brouhle & Jay Corrigan & Rachel Croson & Martin Farnham & Selhan Garip & Luba Habodaszova & Laurie Tipton Johnson & Martin Johnson & David Reiley, 2005. "Local Residential Sorting and Public Goods Provision: A Classroom Demonstration," Journal of Economic Education, Taylor and Francis Journals, vol. 36(4), pages 332-341, October.
- A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
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- Kollman, Ken & Miller, John H & Page, Scott E, 1997. "Political Institutions and Sorting in a Tiebout Model," American Economic Review, American Economic Association, vol. 87(5), pages 977-92, December.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Brueckner, Jan K., 2000. "A Tiebout/tax-competition model," Journal of Public Economics, Elsevier, vol. 77(2), pages 285-306, August.
- Rubinfeld, Daniel L & Shapiro, Perry & Roberts, Judith, 1987. "Tiebout Bias and the Demand for Local Public Schooling," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 426-37, August.
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