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Schools and Location: Tiebout, Alonso, and Governmental Finance Policy
Author(s) -
HANUSHEK ERIC A.,
YILMAZ KUZEY
Publication year - 2013
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12046
Subject(s) - tiebout model , metropolitan area , attractiveness , economics , public economics , consolidation (business) , welfare , public finance , politics , public good , microeconomics , finance , macroeconomics , political science , psychology , market economy , psychoanalysis , law , medicine , pathology
Many discussions of school finance policy fail to consider how households respond to policies that change the attractiveness of different residential locations. We develop a general equilibrium model that incorporates workplace choice, residential choice, and political choice of tax and expenditure levels. Importantly, we consider multiple workplaces, a fundamental feature of today's metropolitan landscape. This basic model permits investigating how accessibility and public goods interact in a metropolitan area. The model is used to analyze two conventional policy initiatives: school district consolidation and district power equalization. The surprising conclusion is that school quality and welfare can fall for all families when these restrictions on choice are introduced.