Concluding remarks
This paper has presented an indirect test of the Tiebout hypothesis that does not require explicit consideration of the interaction between the markets for housing and local public services. The results suggest that, at least in the case of elementary and secondary education, when allowed to choose from a selection of jurisdictions, individuals locate so as to minimize the allocative inefficiency that results from collective provision of local services.
The results obtained here may offer some insight toward understanding why the median voter model performed so well in at least one recent empirical examination. In addition to Holcombe's positive findings, Inman (1978) has provided evidence that the median voter is decisive in budgetary politics. The later test was based on data for 58 Long Island school districts. The analysis presented here suggests that with so plentiful a selection of districts in one suburban area, the frequency distribution of voter demand should be quite narrowly dispersed in each district. It is not surprising, therefore, that the actual level of expenditure conforms closely to that demanded by the voter with the median income.
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Munley, V.G. An alternate test of the Tiebout hypothesis. Public Choice 38, 211–217 (1982). https://doi.org/10.1007/BF00127722
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DOI: https://doi.org/10.1007/BF00127722