Tiebout bias on the demand for local public goods

Goldstein, Gerald S.; Pauly, Mark V.

doi:10.1016/0047-2727(81)90021-9

Cited by 60 publications

(22 citation statements)

References 8 publications

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“…This correlation can bias estimates of the price and income elasticities. Gerald S. Goldstein and Mark V. Pauly (1981) labeled this problem "Tiebout bias" after Tiebout's (1956) conceptual model of local public goods provision.…”

Section: A Reduced-form Approach To Estimating the Demand For Public mentioning

confidence: 99%

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

Kuminoff

Smith

Timmins

2013

Journal of Economic Literature

201

102

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Households "sort" across neighborhoods according to their wealth and their preferences for public goods, social characteristics, and commuting opportunities. The aggregation of these individual choices in markets and in other institutions influences the supply of amenities and local public goods. Pollution, congestion, and the quality of public education are examples. Over the past decade, advances in economic models of this sorting process have led to a new framework that promises to alter the ways we conceptualize the policy evaluation process in the future. These "equilibrium sorting" models use the properties of market equilibria, together with information on household behavior, to infer structural parameters that characterize preference heterogeneity. The results can be used to develop theoretically consistent predictions for the welfare implications of future policy changes. Analysis is not confined to marginal effects or a partial equilibrium setting. Nor is it limited to prices and quantities. Sorting models can integrate descriptions of how non-market goods are generated, estimate how they affect decision making and, in turn, predict how they will be affected by future policies targeting prices or quantities. Conversely, sorting models can predict how equilibrium prices and quantities will be affected by policies that target product quality, information, or amenities generated by the sorting process. These capabilities are just beginning to be understood and used in applied research. This survey article aims to synthesize the state of knowledge on equilibrium sorting, the new possibilities for policy analysis, and the conceptual and empirical challenges that define the frontiers of the literature.

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Section: A Reduced-form Approach To Estimating the Demand For Public mentioning

confidence: 99%

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

Kuminoff

Smith

Timmins

2013

Journal of Economic Literature

201

102

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“…75 A different perspective on Tiebout effects comes from consideration of estimation of expenditure demand functions, where choice of communities by families will generally lead to overstating the income elasticity of demand Goldstein and Pauly (1981), Bergstrom, Rubinfeld, and Shapiro (1982), Gramlich and Rubinfeld (1982), and (2000a) that considers how the numbers of districts in a metropolitan area -a measure of the potential for Tiebout competition -affects performance of the public schools.…”

mentioning

confidence: 99%

Publicly Provided Education

Hanushek

2002

183

171

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Historically, most attention in public programs has been given to the resources devoted to the activity, and resources have been used to index both commitment and quality. Education differs from other areas of public expenditure because direct measures of outcomes are available, making it is possible to consider results and, by implication, to consider the efficiency of provision. Early interpretations of the evidence, emanating from popular interpretations of the Coleman Report that "schools do not make a difference," are incorrect, but the basic evidence behind the statement suggests serious performance problems of government supply, because purchased inputs to schools are not closely related to outcomes. This paper reviews that evidence along with providing an evaluation of the various controversial aspects including issues of causality, consumer behavior, and estimation approaches. Two detailed policy areas are discussed in terms of the evidence on performance: public versus private provision and the financing of schools.

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“…Inman (1978) presents the strongest evidence for the equivalence of the median voter and the individual with median income. On the other hand, Brown and Saks (1983) and Goldstein and Pauly (1981) level strong criticisms against the assumptions that need to hold if the median voter is to be the individual with median income. 4.…”

Section: Notesmentioning

confidence: 99%

An examination of the structure of governance in California school districts before and after Proposition 13

Downes

1996

Public Choice

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This paper explores the structure of governance in California school districts. Two alternative models are considered, the decisive voter (benevolent dictator) model and a model that allows for rent-seeking behavior on the part of district decision makers. A formal test between these two models is proposed and implemented. The decisive voter model is found wanting as an explanation of school district decision making both before and after the passage of Proposition 13. There is, however, some evidence that the constraints imposed on some districts by Proposition 13 have forced decision makers to act in a manner more consistent with the preferences of their constituents.

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Tiebout bias on the demand for local public goods

Cited by 60 publications

References 8 publications

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

Publicly Provided Education

An examination of the structure of governance in California school districts before and after Proposition 13

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