Tiebout sorting, social multipliers, and the demand for school quality
By: Patrick Bayer, Fernando Ferreira, Robert McMillan.
Contributors: Ferreira, Fernando Vendramel.; McMillan, Robert.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10871; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10871.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Housing -- Mathematical models.; Schools -- Evaluation -- Mathematical models.
Description: "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 housing demand is weak, a conclusion that is robust across a variety of research designs.  Using an equilibrium model of residential sorting, this paper closes the gap between these literatures, providing clear evidence that the full effect of school quality on residential sorting is significantly larger than the direct effect %uF818 four times as great for education stratification, twice for income stratification.  This is due to a strong social multiplier associated with heterogeneous preferences for peers and neighbors; initial changes in school quality set in motion a process of re-sorting on the basis of neighborhood characteristics that reinforces itself, giving rise to substantially larger stratification effects"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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