What drives intra-county migration: The impact of local fiscal factors on Tiebout sorting

Abstract

This study adds to the abundant and rich literature on the Tiebout-sorting hypothesis by investigating the motivation for intra-county migration within a state, the move from one municipality to another municipality within the same county. Using the data available from the Census on intra-county migration and demographic characteristics, as well as the Census of Government on local government expenditures, this study employs a difference model to test which local public services and products, in combination with taxes and demographic characteristics, encourage intra-county moves. Ultimately, this study presents a test to determine whether people at the local level are attracted to or repelled by higher spending and taxes. Results indicate that intra-county movers are attracted to local government units with both higher adjusted property taxes and higher government expenditures for certain local public goods and services. The results do not support the notion of the destructive force of competition among local government units resulting in the inability to levy local taxes to fund public goods and services. © Southern Regional Science Association 2012.