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Household Location and Schools in Metropolitan Areas with Heterogeneous Suburbs; Tiebout, Alonso, and Government Policy

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  • Eric A. Hanushek
  • Kuzey Yilmaz

Abstract

An important element in considering school finance policies is that households are not passive but instead respond to policies. Household behavior is especially important in considering how households affect the spatial structure of metropolitan areas where different jurisdictions incorporate bundles of advantages and disadvantages. This paper adds richness to existing urban models by incorporating multiple workplace locations, alternative public services by jurisdiction (school qualities), and voter- determined school expenditure. In our general equilibrium model of residential location and community choice, households base optimizing decisions on commuting costs, school quality, and land rents. The resulting equilibrium has heterogeneous communities in terms of income and tastes for schools. This basic model is used to analyze a series of conventional policy experiments, including school district consolidation and district power utilization. The important conclusion within our range of simulations is that welfare falls for all families with the restrictions on choice that are implied by these approaches.

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  • Eric A. Hanushek & Kuzey Yilmaz, 2010. "Household Location and Schools in Metropolitan Areas with Heterogeneous Suburbs; Tiebout, Alonso, and Government Policy," NBER Working Papers 15915, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15915
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    2. De Fraja, Gianni & Martínez-Mora, Francisco, 2014. "The desegregating effect of school tracking," Journal of Urban Economics, Elsevier, vol. 80(C), pages 164-177.
    3. Leung, Tin Cheuk & Tsang, Kwok Ping, 2012. "Love thy neighbor: Income distribution and housing preferences," Journal of Housing Economics, Elsevier, vol. 21(4), pages 322-335.
    4. Paolo Melindi‐Ghidi, 2018. "Inequality, educational choice, and public school quality in income‐mixing communities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(6), pages 914-943, December.
    5. Mai, Nhat Chi, 2018. "도이모이 이후 베트남의 주거 이동, 선택, 가격 결정요인 연구: 호치민시 사례 중심으로," OSF Preprints 6kdfy, Center for Open Science.
    6. You Seok Chung & Ducksu Seo & Jaehwan Kim, 2018. "Price Determinants and GIS Analysis of the Housing Market in Vietnam: The Cases of Ho Chi Minh City and Hanoi," Sustainability, MDPI, vol. 10(12), pages 1-18, December.
    7. Yoojin Yi & Euijune Kim & Eunjin Choi, 2017. "Linkage among School Performance, Housing Prices, and Residential Mobility," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    8. Rita Yi Man Li & Herru Ching Yu Li, 2018. "Have Housing Prices Gone with the Smelly Wind? Big Data Analysis on Landfill in Hong Kong," Sustainability, MDPI, vol. 10(2), pages 1-19, January.
    9. Hanushek Eric A & Sarpça Sinan & Yilmaz Kuzey, 2011. "Private Schools and Residential Choices: Accessibility, Mobility, and Welfare," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-34, August.
    10. Huang, Daisy J. & Leung, Charles K. & Qu, Baozhi, 2015. "Do bank loans and local amenities explain Chinese urban house prices?," China Economic Review, Elsevier, vol. 34(C), pages 19-38.
    11. Ducksu Seo & You Seok Chung & Youngsang Kwon, 2018. "Price Determinants of Affordable Apartments in Vietnam: Toward the Public–Private Partnerships for Sustainable Housing Development," Sustainability, MDPI, vol. 10(1), pages 1-17, January.
    12. Mai, Nhat Chi, 2018. "Residential Mobility, Housing Choice, and Price Determinants in Transitional Vietnam: The Case of Ho Chi Minh City," OSF Preprints j7wvh, Center for Open Science.

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    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • I2 - Health, Education, and Welfare - - Education
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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