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Wednesday, October 19, 2011

In Response Essay

In Response Essay

In this paper the authors test three hypothesis. The first is whether parameter estimates derived from analyses of local government budgetary aggregates accurately reflect the demands that would be expressed by individual citizens. The second is to test the Tiebout hypothesis that citizens with similar tastes for public goods will live together in jurisdictions that supply these goods with economic efficiency. The third is to compare actual public goods to desired public goods. I will respond to each of these hypotheses and its results.
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In the first hypothesis, Gramlich and Rubinfield come up with mixed results but then state that public services appear to be distributed in a prorich manner. While in education this is confirmed by their results, My interpretation of their results in other spending areas is different. In fact, they state themselves, "evidence concerning other local public services is more spotty and less conclusive." After making a statement like that how can they make the generalization that all public services appear to be distributed in a prorich manner.

The second Tiebout hypothesis, was a bit difficult for me to swallow at first. I did not believe that individuals are that calculating when deciding where to reside. However, Gramlich and Rubinfields results have convinced me. I guess my suspicions are grounded in the fact that the area I live in is rural compared to large metropolitan areas such as Detroit, where there are several separate communities, rather than one large community like Las Cruces.

The third and final hypothesis, median voter hypothesis, seemed to me to be the next appropriate step in this analysis. If the median voter demand was not met by actual public spending then it would not make sense for individuals to base residence on public service. Gramlich and Rubinfields results were what I expected after reading the results from the Tiebout hypothesis.

In conclusion, I have only one statement. While all these results are a confirmation of the three hypotheses, these are only true in the Detroit area. These results can not be generalized to the entire United States. It would be interesting to see if these results hold true in states that have smaller populations and less urbanization.

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