Ethnic diversity and citizens’ support for local public good provision: Evidence from California parcel tax elections

Abstract

How does ethnic diversity within a jurisdiction impact residents’ demand for local public goods? This question is central to the literature on diversity and local spending but remains relatively untested. To fill this gap, we study outcomes from California school district ballot measures to increase school funding. We use an instrumental variable approach to account for endogeneity in diversity. We find no evidence that diversity impacts willingness to be taxed to fund local schools. Our findings suggest that the negative effects of diversity on spending may be occurring through other channels, such as the decision-making of local officials.