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Household Location and Schools in Metropolitan Areas with Heterogeneous Suburbs: Tiebout, Alonso, and Government Policy

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  • Eric Hanushek

    () (Hoover Institute, Stanford University)

  • Kuzey Yilmaz

    (Deparment of Economics, Koc University)

Abstract

An important element in considering school finance policies is that households are not passive but instead respond to policies. Household behavior is especially important in considering how households affect the spatial structure of metropolitan areas where different jurisdictions incorporate bundles of advantages and disadvantages. This paper adds richness to existing urban models by incorporating multiple workplace locations, alternative public services by jurisdiction (school qualities), and voter-determined school expenditure. In our general equilibrium model of residential location and community choice, households base optimizing decisions on commuting costs, school quality, and land rents. The resulting equilibrium has heterogeneous communities in terms of income and tastes for schools. This basic model is used to analyze a series of conventional policy experiments, including school district consolidation and district power utilization. The important conclusion within our range of simulations is that welfare falls for all families with the restrictions on choice that are implied by these approaches.

Suggested Citation

  • Eric Hanushek & Kuzey Yilmaz, 2010. "Household Location and Schools in Metropolitan Areas with Heterogeneous Suburbs: Tiebout, Alonso, and Government Policy," Discussion Papers 09-012, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:09-012
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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:1:p:197-:d:127058 is not listed on IDEAS
    2. Huang, Daisy J. & Leung, Charles K. & Qu, Baozhi, 2015. "Do bank loans and local amenities explain Chinese urban house prices?," China Economic Review, Elsevier, vol. 34(C), pages 19-38.
    3. Leung, Tin Cheuk & Tsang, Kwok Ping, 2012. "Love thy neighbor: Income distribution and housing preferences," Journal of Housing Economics, Elsevier, vol. 21(4), pages 322-335.
    4. Leung, Charles Ka Yui & Sarpça, Sinan & Yilmaz, Kuzey, 2012. "Public housing units vs. housing vouchers: Accessibility, local public goods, and welfare," Journal of Housing Economics, Elsevier, vol. 21(4), pages 310-321.
    5. De Fraja, Gianni & Martínez-Mora, Francisco, 2014. "The desegregating effect of school tracking," Journal of Urban Economics, Elsevier, vol. 80(C), pages 164-177.
    6. Paolo Melindi-Ghidi, 2016. "Inequality, Educational Choice and Public School Quality in Income Mixing Communities," AMSE Working Papers 1629, Aix-Marseille School of Economics, Marseille, France.
    7. Hanushek Eric A & Sarpça Sinan & Yilmaz Kuzey, 2011. "Private Schools and Residential Choices: Accessibility, Mobility, and Welfare," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-34, August.
    8. repec:gam:jsusta:v:9:y:2017:i:6:p:1075-:d:102126 is not listed on IDEAS

    More about this item

    Keywords

    school finance; school district;

    JEL classification:

    • I29 - Health, Education, and Welfare - - Education - - - Other
    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other

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