IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/12960.html
   My bibliography  Save this paper

Schools and Location: Tiebout, Alonso, and Government Policy

Author

Listed:
  • Eric A. Hanushek
  • Kuzey Yilmaz

Abstract

An important element in considering school finance policies is that households are not passive. Instead they respond to policies with a combination of modified residential choice and political choice of tax levels. The highly stylized decision models of most existing analyses, however, lead to conerns about the policy evaluations. In our general equilibrium model of residential location and community choice, households base optimizing decisions on commuting costs, school quality, and land rents. With both centralized and decentralized employment, the resulting equilibrium has heterogeneous communities in terms of income and tastes for schools. This model is used to analyze a series of conventional policy experiments, including school district consolidation, district power utilization, and different equalization devices. The important conclusion is that welfare falls for all families with the restrictions in choice that are implied by these approaches.

Suggested Citation

  • Eric A. Hanushek & Kuzey Yilmaz, 2007. "Schools and Location: Tiebout, Alonso, and Government Policy," NBER Working Papers 12960, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12960 Note: ED PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w12960.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Epple, Dennis & Filimon, Radu & Romer, Thomas, 1993. "Existence of voting and housing equilibrium in a system of communities with property taxes," Regional Science and Urban Economics, Elsevier, vol. 23(5), pages 585-610, November.
    2. Sullivan, Arthur M., 1986. "A general equilibrium model with agglomerative economies and decentralized employment," Journal of Urban Economics, Elsevier, vol. 20(1), pages 55-74, July.
    3. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527 Elsevier.
    4. 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.
    5. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, November.
    6. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do The Poor Live In Cities?," Harvard Institute of Economic Research Working Papers 1891, Harvard - Institute of Economic Research.
    7. Ross, Stephen & Yinger, John, 1995. "Comparative static analysis of open urban models with a full labor market and suburban employment," Regional Science and Urban Economics, Elsevier, vol. 25(5), pages 575-605, October.
    8. Feldstein, Martin S, 1975. "Wealth Neutrality and Local Choice in Public Education," American Economic Review, American Economic Association, vol. 65(1), pages 75-89, March.
    9. McMillen, Daniel P. & Smith, Stefani C., 2003. "The number of subcenters in large urban areas," Journal of Urban Economics, Elsevier, vol. 53(3), pages 321-338, May.
    10. Yinger, John, 1982. "Capitalization and the Theory of Local Public Finance," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 917-943, October.
    11. Charles Ka-yui Leung & Dandan Feng, 2004. "Testing Alternative Theories of Property Price-Trading Volume with Commercial Real Estate Market Data," Departmental Working Papers _159, Chinese University of Hong Kong, Department of Economics.
    12. Duncan Black & Vernon Henderson, 1997. "Urban Growth," NBER Working Papers 6008, National Bureau of Economic Research, Inc.
    13. Caroline M. Hoxby, 2001. "All School Finance Equalizations are Not Created Equal," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1189-1231.
    14. Hanushek, Eric & Yilmaz, Kuzey, 2007. "The complementarity of Tiebout and Alonso," Journal of Housing Economics, Elsevier, vol. 16(2), pages 243-261, June.
    15. Epple, Dennis & Nechyba, Thomas, 2004. "Fiscal decentralization," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 55, pages 2423-2480 Elsevier.
    16. Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters,in: The Economics of School Choice, pages 227-286 National Bureau of Economic Research, Inc.
    17. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    18. Ellickson, Bryan, 1971. "Jurisdictional Fragmentation and Residential Choice," American Economic Review, American Economic Association, vol. 61(2), pages 334-339, May.
    19. Edward L. Glaeser & Matthew E. Kahn, 2001. "Decentralized Employment and the Transformation of the American City," Harvard Institute of Economic Research Working Papers 1912, Harvard - Institute of Economic Research.
    20. Raquel Fernandez & Richard Rogerson, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 135-164.
    21. Epple, Dennis & Filimon, Radu & Romer, Thomas, 1984. "Equilibrium among local jurisdictions: toward an integrated treatment of voting and residential choice," Journal of Public Economics, Elsevier, pages 281-308.
    22. Eric A. Hanushek, 2003. "The Failure of Input-Based Schooling Policies," Economic Journal, Royal Economic Society, vol. 113(485), pages 64-98, February.
    23. Brasington, David M., 1999. "Joint provision of public goods: the consolidation of school districts," Journal of Public Economics, Elsevier, pages 373-393.
    24. Leung, Charles, 2004. "Macroeconomics and housing: a review of the literature," Journal of Housing Economics, Elsevier, pages 249-267.
    25. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
    26. Bruce W. Hamilton, 1975. "Zoning and Property Taxation in a System of Local Governments," Urban Studies, Urban Studies Journal Limited, vol. 12(2), pages 205-211, June.
    27. Howard Pack & Janet Rothenberg Pack, 1977. "Metropolitan Fragmentation and Suburban Homogeneity," Urban Studies, Urban Studies Journal Limited, vol. 14(2), pages 191-201, June.
    28. White, Michelle J., 1999. "Urban areas with decentralized employment: Theory and empirical work," Handbook of Regional and Urban Economics,in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 36, pages 1375-1412 Elsevier.
    29. White, Michelle J., 1976. "Firm suburbanization and urban subcenters," Journal of Urban Economics, Elsevier, vol. 3(4), pages 323-343, October.
    30. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weizeng Sun & Siqi Zheng & Yuming Fu, 2016. "Local Public Service Provision and Spatial Inequality in Chinese Cities," ERSA conference papers ersa16p799, European Regional Science Association.
    2. Marco Cipriani & Graciela Kaminsky, 2007. "Volatility in International Financial Market Issuance: The Role of the Financial Center," Open Economies Review, Springer, pages 157-176.
    3. Huang, Daisy J. & Leung, Charles Ka Yui & Tse, Chung-Yi, 2017. "What account for the differences in rent-price ratio and turnover rate? A search-and-matching approach," MPRA Paper 76864, University Library of Munich, Germany.
    4. Shin-Kun Peng, 2014. "Housing Market and Agglomeration of Rent-Seeking Activities: Implications for Regional Development," ERSA conference papers ersa14p326, European Regional Science Association.
    5. Charles Ka Yui LEUNG & Wai Yip MA & Jun ZHANG, 2014. "The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence," International Real Estate Review, Asian Real Estate Society, vol. 17(1), pages 63-107.
    6. repec:gam:jsusta:v:9:y:2017:i:10:p:1872-:d:115537 is not listed on IDEAS
    7. Leung, Charles Ka Yui & Chow, Kenneth & Yiu, Matthew & Tam, Dickson, 2010. "House Market in Chinese Cities: Dynamic Modeling, In-Sampling Fitting and Out-of-Sample Forecasting," MPRA Paper 27367, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • I2 - Health, Education, and Welfare - - Education
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12960. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.