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Tiebout Hypothesis

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Abstract

Tiebout (J Polit Econ 64: 416–424, 1956) argued that efficient local public good provision would emerge as households choose among communities offering different local public goods bundles. This article highlights research linking the Tiebout hypothesis to real-world local political jurisdictions, the first such link having been forged by the pioneering contribution of Oates (J Polit Econ 77: 957–971, 1969). Subsequent research has studied voting over tax and expenditure policies within municipalities in a metropolitan area, and sorting of the metropolitan population both within and across those municipalities. This research has provided the foundation for econometric analysis and policy applications.

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Acknowledgment

In writing this article, I have benefited greatly from Oates (2006) and Fischel (2006). More extensive treatment is provided in Ross and Yinger (1998), Scotchmer (2002) and Epple and Nechyba (2004).

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    Dennis Epple

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Epple, D. (2018). Tiebout Hypothesis. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1372

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