The essence of the Tiebout hypothesis is that there exists a mechanism for preference revelation regarding publicly provided goods so long as consumer-voters can choose among ‘jurisdictions’. The obvious application — the one both Tiebout and his followers had in mind — is that of a large number of autonomous suburban jurisdictions providing those goods which are generally in the domain of local governments, such a primary and secondary education, police and fire protection, sewer and water provision.
KeywordsScale Economy Community Size Local Public Good Preference Revelation Capitalization Effect
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