Local Public Good Provision: Voting, Peer Effects, and Mobility

57 Pages Posted: 16 Jan 2006 Last revised: 12 Jul 2010

See all articles by Stephen Calabrese

Stephen Calabrese

University of South Florida - Department of Government and International Affairs; Carnegie Mellon University - David A. Tepper School of Business

Dennis Epple

Carnegie Mellon University; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Thomas Romer

Princeton University - Department of Political Science; Princeton University - Woodrow Wilson School of Public and International Affairs

Holger Sieg

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2005

Abstract

Few empirical strategies have been developed that investigate public provision under majority rule while taking explicit account of the constraints implied by mobility of households. The goal of this paper is to improve our understanding of voting in local communities when neighborhood quality depends on peer or neighborhood effects. We develop a new empirical approach which allows us to impose all restrictions that arise from locational equilibrium models with myopic voting simultaneously on the data generating process. We can then analyze how close myopic models come in replicating the main regularities about expenditures, taxes, sorting by income and housing observed in the data. We find that a myopic voting model that incorporates peer effects fits all dimensions of the data reasonably well.

Suggested Citation

Calabrese, Stephen and Epple, Dennis and Romer, Thomas and Sieg, Holger, Local Public Good Provision: Voting, Peer Effects, and Mobility (October 2005). NBER Working Paper No. w11720. Available at SSRN: https://ssrn.com/abstract=837163

Stephen Calabrese (Contact Author)

University of South Florida - Department of Government and International Affairs ( email )

Tampa, FL 33620
United States

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
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Dennis Epple

Carnegie Mellon University ( email )

Tepper School of Business
Pittsburgh, PA 15213-3890
United States
412-268-1536 (Phone)
412-268-7357 (Fax)

National Bureau of Economic Research (NBER)

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Thomas Romer

Princeton University - Department of Political Science ( email )

Corwin Hall
Princeton, NJ 08544-1013
United States

Princeton University - Woodrow Wilson School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Holger Sieg

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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