Abstract
This study adds to the abundant and rich literature on the Tiebout-sorting hypothesis by investigating the motivation for intra-county migration within a state, the move from one municipality to another municipality within the same county. Using the data available from the Census on intra-county migration and demographic characteristics, as well as the Census of Government on local government expenditures, this study employs a difference model to test which local public services and products, in combination with taxes and demographic characteristics, encourage intra-county moves. Ultimately, this study presents a test to determine whether people at the local level are attracted to or repelled by higher spending and taxes. Results indicate that intra-county movers are attracted to local government units with both higher adjusted property taxes and higher government expenditures for certain local public goods and services. The results do not support the notion of the destructive force of competition among local government units resulting in the inability to levy local taxes to fund public goods and services.
Highlights
The issue of government consolidation has been receiving ever-greater attention recently as governments seek new ways to pare costs
Some U.S state governments (e.g., Pennsylvania and New Jersey) have been extolling the virtues of local government consolidation in an effort to give the consumer-voter some property tax relief. These same agencies further suggest that heavy local government fragmentation leads to the sub-optimal provision of some public goods and services through free riding and their inability to raise local taxes, with the resultant underinvestment in public infrastructure
Local government expenditures, the independent variables are the difference in expenditures between destination and origin minor civil division (MCD) for fire protection, other general government, law enforcement, and roads, as well as government expenditures per capita
Summary
The issue of government consolidation has been receiving ever-greater attention recently as governments seek new ways to pare costs. Some U.S state governments (e.g., Pennsylvania and New Jersey) have been extolling the virtues of local government consolidation in an effort to give the consumer-voter some property tax relief. These same agencies further suggest that heavy local government fragmentation leads to the sub-optimal provision of some public goods and services through free riding and their inability to raise local taxes, with the resultant underinvestment in public infrastructure. Dealing with local governments enables a strict focus on local level differences, such as local taxes, expenditures, housing, schooling, and delivery of other public services, testing a Tiebout-like mechanism at work.
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