The Tiebout Hypothesis and Majority Rule: An Empirical Analysis

Dennis Epple, Thomas Romer and Holger Sieg

No 6977, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper provides a comprehensive empirical analysis of majority rule and Tiebout sorting within a system of local jurisdictions. The idea behind the estimation procedure is to investigate whether observed levels of public expenditures satisfy necessary conditions implied by majority rule in a general equilibrium model of residential choice. The estimator controls for both observed and unobserved heterogeneity among households, observed and unobserved characteristics of communities, the potential endogeneity of prices and expenditures as well as the self-selection of households into communities of their choice. We estimate the structural parameters of the model using data from the Boston Metropolitan Area. The empirical findings are by and large supportive of our approach.

JEL-codes: C51 H31 (search for similar items in EconPapers)
Date: 1999-02
New Economics Papers: this item is included in nep-cdm, nep-pbe, nep-pol and nep-pub
Note: PE
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Citations: View citations in EconPapers (3)

Published as A revision of this paper was published as: â€œInterjurisdictional Sorting and Majority Rule: An Empirical Analysis,â€? D. Epple, T. Romer and H. Sieg, Econometrica, November 2001.

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