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Neighborhood Influence and Political Change: Evidence from US School Districts

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  • Johannes Rincke

    (Zentrum für Europäische Wirtschaftsforschung)

Abstract

This paper investigates how local jurisdictions in a federal system influence each other in the adoption of policy innovations. We look at school districts in Michigan and their participation in a public school choice program launched in 1996. Districts' participation decisions are modelled as simultaneous discrete choice decisions using a spatial latent variable model. Strong effects are found saying that lagged adoptions of neighbors positively affect the current probability of participation. This finding is robust to various changes in specification. The results suggest that in federal systems the diffusion of policy innovations is stimulated by horizontal interactions between jurisdictions.

Suggested Citation

  • Johannes Rincke, 2005. "Neighborhood Influence and Political Change: Evidence from US School Districts," Public Economics 0511011, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0511011 Note: Type of Document - pdf
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    File URL: http://econwpa.repec.org/eps/pe/papers/0511/0511011.pdf
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    References listed on IDEAS

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    1. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
    2. Christos Kotsogiannis & Robert Schwager, 2005. "Policy Innovation In Federal Systems," Urban/Regional 0504001, EconWPA.
    3. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    4. Johannes Rincke, 2005. "Policy Innovation in Local Jurisdictions: Testing the Neighborhood Influence Against the Free-Riding Hypothesis," Public Economics 0511017, EconWPA.
    5. repec:cup:apsrev:v:63:y:1969:i:03:p:880-899_25 is not listed on IDEAS
    6. Gale, Douglas, 1996. "What have we learned from social learning?," European Economic Review, Elsevier, vol. 40(3-5), pages 617-628, April.
    7. Brueckner, Jan K., 1998. "Testing for Strategic Interaction Among Local Governments: The Case of Growth Controls," Journal of Urban Economics, Elsevier, vol. 44(3), pages 438-467, November.
    8. David Hirshleifer & Siew Hong Teoh, 2003. "Herd Behaviour and Cascading in Capital Markets: a Review and Synthesis," European Financial Management, European Financial Management Association, vol. 9(1), pages 25-66.
    9. Rincke, Johannes, 2005. "Policy Innovation in Local Jurisdictions: Testing the Neighborhood Influence Against the Free-Riding Hypothesis," ZEW Discussion Papers 05-08, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Krasker, William S. & Kuh, Edwin & Welsch, Roy E., 1983. "Estimation for dirty data and flawed models," Handbook of Econometrics,in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 11, pages 651-698 Elsevier.
    11. Hautsch, Nikolaus & Klotz, Stefan, 2003. "Estimating the neighborhood influence on decision makers: theory and an application on the analysis of innovation decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 97-113, September.
    12. repec:cup:apsrev:v:63:y:1969:i:03:p:880-899_00 is not listed on IDEAS
    13. Johannes Rincke, 2005. "Policy Innovation in Local Jurisdictions: Testing the Neighborhood Influence Against the Free-Riding Hypothesis," Public Economics 0511009, EconWPA.
    14. Case, Anne, 1992. "Neighborhood influence and technological change," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 491-508, September.
    15. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Strategic Interaction and the Determination of Environmental Policy across U.S. States," Journal of Urban Economics, Elsevier, vol. 51(1), pages 101-122, January.
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    Cited by:

    1. Kotsogiannis, Christos & Schwager, Robert, 2006. "On the incentives to experiment in federations," Journal of Urban Economics, Elsevier, vol. 60(3), pages 484-497, November.

    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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