Routledge Dictionary of Economics, Second Edition
Tiebout hypothesis (H7, R1)
The view that there should be small local government areas in order to increase the amount of citizen choice between different combinations of facilities and local taxes. Individuals would be able to obtain the combination closest to their preferences by moving between these small areas.
See also: fiscal mobility
References
Mieszkowski, P.
and Zodrow, G.R. (1989) ‘Taxation and the Tiebout model: the differential effects of head taxes, taxes on land rents, and property taxes’, Journal of Economic Literature 27 (September):1098–1146.
Oates, W.Y. (1969) ‘The effect of property taxes and local public spending on property values: an empirical study of tax capitalization and the Tiebout hypothesis’, Journal of Political Economy 77:957–71.
Tiebout, C. (1956) ‘A pure theory of local government expenditures’, Journal of Political Economy 64:416–24.
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