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A Direct Test of the "Explanation" for Incomplete Stratification in Vertical Sorting Models

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  • Jacob Fishman
  • V. Kerry Smith

Abstract

This paper uses the 2011 Phoenix Area Social Survey to evaluate the plausibility of the assumptions made with pure characteristics or vertical sorting models to rationalize incomplete stratification of households across local communities by income. The analysis with a well-recognized index of environmental attitudes, the New Ecological Paradigm (NEP), confirms the correlations in equilibrium outcomes implied by these models. As a result, it supports the role of differences in the tastes for public goods as an explanation for the sorting outcomes.

Suggested Citation

  • Jacob Fishman & V. Kerry Smith, 2013. "A Direct Test of the "Explanation" for Incomplete Stratification in Vertical Sorting Models," NBER Working Papers 19387, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19387
    Note: EEE PE
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    File URL: http://www.nber.org/papers/w19387.pdf
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    References listed on IDEAS

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    1. Epple, Dennis & Platt, Glenn J., 1998. "Equilibrium and Local Redistribution in an Urban Economy when Households Differ in both Preferences and Incomes," Journal of Urban Economics, Elsevier, vol. 43(1), pages 23-51, January.
    2. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
    3. Walsh, Randy, 2007. "Endogenous open space amenities in a locational equilibrium," Journal of Urban Economics, Elsevier, vol. 61(2), pages 319-344, March.
    4. Kerry Smith, V. & Sieg, Holger & Spencer Banzhaf, H. & Walsh, Randall P., 2004. "General equilibrium benefits for environmental improvements: projected ozone reductions under EPA's Prospective Analysis for the Los Angeles air basin," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 559-584, May.
    5. Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, 2004. "Estimating The General Equilibrium Benefits Of Large Changes In Spatially Delineated Public Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1047-1077, November.
    6. Kuminoff, Nicolai V., 2008. "Recovering Preferences from a Dual-Market Locational Equilibrium," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5989, Australian Agricultural and Resource Economics Society.
    7. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    8. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    9. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    10. Kotchen, Matthew J. & Moore, Michael R., 2007. "Private provision of environmental public goods: Household participation in green-electricity programs," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 1-16, January.
    11. Sieg, Holger & Smith, V. Kerry & Banzhaf, H. Spencer & Walsh, Randy, 2002. "Interjurisdictional housing prices in locational equilibrium," Journal of Urban Economics, Elsevier, vol. 52(1), pages 131-153, July.
    12. John A. List & Michael K. Price (ed.), 2013. "Handbook on Experimental Economics and the Environment," Books, Edward Elgar Publishing, number 12964.
    13. Nathaniel Hendren, 2013. "The Policy Elasticity," NBER Working Papers 19177, National Bureau of Economic Research, Inc.
    14. Kotchen, Matthew J. & Reiling, Stephen D., 2000. "Environmental attitudes, motivations, and contingent valuation of nonuse values: a case study involving endangered species," Ecological Economics, Elsevier, vol. 32(1), pages 93-107, January.
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    Cited by:

    1. Bartczak, Anna, 2015. "The role of social and environmental attitudes in non-market valuation," Forest Policy and Economics, Elsevier, vol. 50(C), pages 357-365.

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    More about this item

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H4 - Public Economics - - Publicly Provided Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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