American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Assessing the Importance of Tiebout Sorting: Local Heterogeneity from 1850 to 1990
American Economic Review
vol. 93,
no. 5, December 2003
(pp. 1648–1677)
Abstract
This paper argues that long-run trends in geographic segregation are inconsistent with models where residential choice depends solely on local public goods (the Tiebout hypothesis). We develop an extension of the Tiebout model that predicts as mobility costs fall, the heterogeneity across communities of individual public good preferences and of public good provision must (weakly) increase. Given the secular decline in mobility costs, these predictions can be evaluated using historical data. We find decreasing heterogeneity in policies and proxies for preferences across (i) a sample of U.S. municipalities (1870-1990); (ii) all Boston-area municipalities (1870-1990); and (iii) all U.S. counties (1850-1990).Citation
Rhode, Paul, W., and Koleman S. Strumpf. 2003. "Assessing the Importance of Tiebout Sorting: Local Heterogeneity from 1850 to 1990." American Economic Review, 93 (5): 1648–1677. DOI: 10.1257/000282803322655482Additional Materials
JEL Classification
- H73 State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
- N41 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: Pre-1913
- N91 Regional and Urban History: U.S.; Canada: Pre-1913
- N92 Regional and Urban History: U.S.; Canada: 1913-
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R58 Regional Development Planning and Policy