Tiebout Choice and the Voucher

Eric Brunner () and Jennifer Imazeki

No 2006-10, Working papers from University of Connecticut, Department of Economics

Abstract: This paper examines who is likely to gain and who is likely to lose under a universal voucher program. Following Epple and Romano (1998, 2003), and Nechyba (2000, 2003a), we focus on the idea that gains and losses under a universal voucher depend on two effects: changes in peer group composition and changes in housing values. We show that the direction and magnitude of each of these effects hinges critically on market structure, i.e., the amount of school choice that already exists in the public sector. In markets with little or no Tiebout choice, potential changes in peer group composition create an incentive for high-socioeconomic (SES) households to vote for the voucher and for low-SES households to vote against voucher. In contrast, in markets with significant Tiebout choice, potential changes in housing values create an incentive for high-SES households to vote against the voucher and for low-SES households to vote for the voucher. Using data on vote outcomes from California's 2000 voucher initiative, we find evidence consistent with those predictions.

Keywords: School Vouchers; Tiebout Choice; Voting (search for similar items in EconPapers)
JEL-codes: H7 I2 L1 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006-04
New Economics Papers: this item is included in nep-cdm and nep-ure
Note: : For helpful comments on a previous draft of this paper, we are indebted to Lawrence Kenny, Brian Knight, Jon Sonstelie, Steve Ross, Kim Rueben, Miguel Urquiola, and seminar and meeting participants at Columbia University, New York University, the University of Connecticut, the University of Kentucky, the Public Policy Institute of California, the American Education Finance Association, and the Southern Economic Association.
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