Do People Vote with Their Feet? An Empirical Test of Tiebout

American Economic Review · 2008 · Volume 98 · Issue 3

Abstract

Charles Tiebout's suggestion that people "vote with their feet" for communities with optimal bundles of taxes and public goods has played a central role in local public finance for over 50 years. Using a locational equilibrium model, we derive formal tests of his premise. The model predicts increased population density in neighborhoods experiencing exogenous improvements in public goods and, for large improvements, increased relative mean incomes. We test these hypotheses in the context of changing air quality. Our results provide strong empirical support for the notion that households "vote with their feet" for environmental quality.

Keywords

Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior, Public Goods, State and Local Government, Intergovernmental Relations: Interjurisdictional Differentials and Their Effects, Air Pollution, Water Pollution, Noise, Hazardous Waste, Solid Waste, Recycling

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