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Local Public Good Provision: Voting, Peer Effects, and Mobility

  • Calabrese, Stephen

    (U of South Florida)

  • Epple, Dennis

    (Carnegie Mellon U)

  • Romer, Thomas

    (Princeton U)

  • Sieg, Holger

    (Carnegie Mellon U)

Registered author(s):

    Few empirical strategies have been developed that investigate public provision under majority rule while taking explicit account of the constraints implied by mobility of households. The goal of this paper is to improve our understanding of voting in local communities when neighborhood quality depends on peer or neighborhood effects. We develop a new empirical approach which allows us to impose all restrictions that arise from locational equilibrium models with myopic voting simultaneously on the data generating process. We can then analyze how close myopic models come in replicating the main regularities about expenditures, taxes, sorting by income and housing observed in the data. We find that a myopic voting model that incorporates peer effects fits all dimensions of the data reasonably well.

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    Paper provided by Princeton University, Research Program in Political Economy in its series Papers with number 10-04-2005.

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    Date of creation: Oct 2005
    Date of revision:
    Handle: RePEc:ecl:prirpe:10-04-2005
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