Date of Degree
Earth & Environmental Sciences
Geography | Public Affairs, Public Policy and Public Administration
In a seminal paper, Tiebout (1956) argues that a large number of small local governments will function as a market in local services, leading to efficient allocation of local public goods. This result only obtains if households actually move in response to local fiscal differences. Spatial dependence of socioeconomic variables confounds attempts to infer Tiebout-motivated residential choice from observed socioeconomic homogeneity. I correct for this by focusing on socioeconomic difference across local government borders. In an investigation of socioeconomic sorting in Queens and Nassau Counties, NY, I find strong evidence of income sorting at the level of small suburban municipalities and of racial sorting across school districts. There is no evidence of income sorting across school districts, which I attribute to NYS school districts' lack of control over zoning.
This study design exploits the incongruent boundaries of municipalities and school districts in New York State. In neighboring New Jersey, school districts are by law coterminous with municipalities. I hypothesize that, where boundaries are coterminous, sorting by school district and municipality will be mutually reinforcing. This hypothesis is tested in a comparison of income and racial heterogeneity in Nassau County, NY, with Bergen County, NJ, both suburban commuter counties within the New York MSA. Sorting is not found to be higher in Bergen than in Nassau. These negative results imply that the argued advantages of coterminous boundaries in terms of citizen oversight (Schwartz 2001) need not be traded off against increased segregation.
I conclude with a discussion of the scope of public services that may be allocated via the Tiebout mechanism. Education is a primary good of such importance to well-being and to democracy that a pure system of local finance violates Rawlsian principles of justice (Rawls 1971). If good reasons exist, in terms of efficiency and/or democratic participation, for supporting local control in public goods with such significant distributive impacts, equalizing transfers are necessary to achieve just outcomes. This policy of equalizing transfers is consistent both with a spatialized Rawlsian theory of justice, as well as with the welfare economist's concept of efficiency (Schwab, Oates 1991).
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Hachadoorian, Lee, "Tiebout Sorting and Jurisdictional Homogeneity: Empirical Validity and Ethical Implications" (2011). CUNY Academic Works.