The many faces of Tiebout bias in local education demand parameter estimates
Article Abstract:
The estimation of household sorting across communities on the basis of local public service demand can yield the phenomenon of Tiebout bias in demand parameter estimates obtained from aggregate data. Research into the magnitude of Tiebout bias in local education demand parameter estimates reveals that the Tiebout bias identified by Goldstein and Pauley is substantial, but that Goldstein and Pauly's proposal to eliminate bias introduces new bias through measurement errors connected with dependent variables, for a downward measurement of up to 60%. Research results reveal that households sort themselves across communities on the basis of demand for local public services. Deviations of household income from the community's median income are significant and are negative determinants of household demand for local education expenditures.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1990
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Calculating elasticities from structural parameters in implicit markets
Article Abstract:
Much of the empirical analysis of housing markets has been based on Rosen's model of implicit markets for estimating demand or supply functions for housing characteristics. However, it is only recently that studies have undertaken estimating the demand for the characteristics of implicit goods. Hypothetical elasticities appears to be the best method for researching and measuring consumers' responsiveness in an implicit market to price changes. Hypothetical elasticities are preferable to common elasticities for the traditional analysis of consumers' behavior or for social accounting since common elasticities significantly underestimate the substitution between non-housing goods and housing characteristics and are inadequate in determining the degree of the complementarity of housing characteristics.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1990
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