An Extension of the Tiebout Hypothesis of Voting with One's Feet: The Medicaid Magnet Hypothesis

This study empirically extends the Tiebout hypothesis of "voting with one's feet" in two ways. First, it provides updated estimates using net migration data for the period 2000-2008. Second, in addition to investigating variables reflecting public education outlays, property taxation and income taxation, it investigates whether migrants are attracted to states with higher Medicaid benefits per recipient. The latter hypothesis is referred to as the "Medicaid magnet hypothesis". The analysis includes three economic variables, three quality of life variables, and three Tiebout-type factors, in addition to Medicaid benefits. Empirical results indicate that consumer voters were attracted to states with higher per pupil public school spending, lower property and income tax rates, and that certain consumer-voters were attracted to states that offer higher levels of Medicaid benefits.