Black households in the United States with high levels of income and education (SES) typically face a stark tradeoff when deciding where to live. They can choose neighborhoods with high levels of public goods or a high proportion of blacks, but very few neighborhoods combine both, a fact we...

In many theoretical public finance models, school quality plays a central role as a determinant of household location choices and in turn, of neighborhood stratification. In contrast, the recent empirical literature has almost universally concluded that the direct effect of school quality on...

While residents receive similar benefits from many local government programs, only about one-third of all households have children in public schools. We argue that capitalization of school spending into house prices can encourage residents to support spending on schools, even if the residents...

In this paper we use a 'market-based' approach to examine whether increased school expenditures are valued by potential residents and whether the current level of public school provision is inefficient. We do so by employing an instrumental variables strategy to estimate the effect of state...

The Tiebout hypothesis, which states that individuals will costlessly sort themselves across local communities according to their public good preferences, is the workhorse of the local public finance literature. This paper develops a test of the Tiebout hypothesis using historical variation in...

This paper uses a discrete choice approach to estimate the impact of local fiscal and other variables on individual community choices. It employs a combination of a unique micro data set composed of ninety percent of all homeowners in six school districts in Camden County, New Jersey and...

This paper attempts to address two long standing questions in Public Finance: (i) why is the property tax, despite popular complaints about its fairness, the almost exclusive tax instrument used by local governments, and (ii) why do we consistently observe higher levels of governments undermine...

This paper analyzes the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. The micro-founded conceptual framework we develop predicts that a country's public goods (i) decrease in its overall linguistic...

This paper aims to show that culture is an important determinant of the effectiveness of formal democratic institutions, such as elections. We collect new data to document the presence of voluntary and social organizations and the history of electoral reforms in Chinese villages. We use the...