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Do People Vote with Their Feet? An Empirical Test of Environmental Gentrification

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  • Banzhaf, H. Spencer

    (Resources for the Future)

  • Walsh, Randy

Abstract

Tiebout’s (1956) suggestion that people “vote with their feet” to find the community that provides their optimal bundle of taxes and public goods has played a central role in the theory of local public finance over the past 50 years. Given the central importance of Tiebout’s insights, there have been surprisingly few direct tests of his premise. In this paper, we use a Tiebout equilibrium model to derive testable hypotheses about changes in local community demographics. The model clearly predicts increased population density in neighborhoods that experience an exogenous increase in public goods but yields only tentative predictions about the effect on neighborhood composition. To test these hypotheses, we use a difference-in-difference model to identify the effect of initial pollution levels and changes in local pollution on population and demographic composition. Our results provide strong empirical support for the notion that households “vote with their feet” in response to changes in environmental quality. This result has two implications. First, and most broadly, it provides direct empirical support for the assumptions underlying the Tiebout model. Second, in our particular application, the potential for what we call “environmental gentrification” has important implications both for the analysis of environmental equity and for the design of environmental policies aimed at benefiting the less-advantaged elements of society.

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  • Banzhaf, H. Spencer & Walsh, Randy, 2006. "Do People Vote with Their Feet? An Empirical Test of Environmental Gentrification," RFF Working Paper Series dp-06-10, Resources for the Future.
  • Handle: RePEc:rff:dpaper:dp-06-10
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-06-10.pdf
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    References listed on IDEAS

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    2. Zhang, Yingjie & Zhang, Tianzheng & Zeng, Yingxiang & Cheng, Baodong & Li, Hongxun, 2021. "Designating National Forest Cities in China: Does the policy improve the urban living environment?," Forest Policy and Economics, Elsevier, vol. 125(C).
    3. Robert M. Bradley, 2010. "Direct and indirect benefits of improving river quality: quantifying benefits and a case study of the River Klang, Malaysia," Environment Systems and Decisions, Springer, vol. 30(3), pages 228-241, September.
    4. Douglas S. Noonan & Douglas J. Krupka & Brett M. Baden, 2007. "Neighborhood Dynamics And Price Effects Of Superfund Site Clean‐Up," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 665-692, October.
    5. Michael Greenstone & Justin Gallagher, 2008. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," The Quarterly Journal of Economics, Oxford University Press, vol. 123(3), pages 951-1003.
    6. Troy D. Abel & Jonah White & Stacy Clauson, 2015. "Risky Business: Sustainability and Industrial Land Use across Seattle’s Gentrifying Riskscape," Sustainability, MDPI, vol. 7(11), pages 1-36, November.
    7. Jin Guo & Junhong Bai, 2019. "The Role of Public Participation in Environmental Governance: Empirical Evidence from China," Sustainability, MDPI, vol. 11(17), pages 1-19, August.
    8. Laurent, Éloi, 2011. "Issues in environmental justice within the European Union," Ecological Economics, Elsevier, vol. 70(11), pages 1846-1853, September.
    9. Trina Hamilton & Winifred Curran, 2013. "From “Five Angry Women†to “Kick-ass Community†: Gentrification and Environmental Activism in Brooklyn and Beyond," Urban Studies, Urban Studies Journal Limited, vol. 50(8), pages 1557-1574, June.
    10. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2013. "Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings," NBER Working Papers 18700, National Bureau of Economic Research, Inc.
    11. Tsai Chang-hsien, 2011. "International Jurisdictional Competition under Globalization: From the U.S. Regulation of Foreign Private Issuers to Taiwan's Restrictions on Outward Investment in Mainland China," Asian Journal of Law and Economics, De Gruyter, vol. 2(1), pages 1-102, April.
    12. Pham, Hai-Vu, 2010. "La dimension conflictuelle des projets d’infrastructure : essais sur la décision publique, le contentieux et les prix immobiliers," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/5656 edited by Torre, André & Kirat, Thierry.
    13. Lucas W. Davis, 2008. "The Effect of Power Plants on Local Housing Values and Rents: Evidence from Restricted Census Microdata," Working Papers 0809, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.

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    More about this item

    Keywords

    Tiebout; gentrification; air quality;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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