THE DYNAMIC IMPLICATIONS OF THE TIEBOUT MODEL: THE CHANGING COMPOSITION OF

The Tiebout model implies, under certain assumptions, that communities will become increasingly homogeneous by income and preferences, and perhaps by race, land use, and other community characteristics. This article tests the hypothesis of increasing homogeneity with equations describing changes among Boston area communities between 1960 and 1970. The results confirm increasing segregation by income and (much more weakly) segregation by age, but other community characteristics show no distinct trend. The system of equations is used to forecast community characteristics, and these projections confirm a tendency toward greater inequality in public spending. The results imply that the Pareto-optimality of the Tiebout model will not be attained and that any efficiencies may come at the expense of greater inequities. In the analysis of-public-- finance And local communities, * the model formulated. by Charles, Tiebout (1956). ba-s,. the model formula Ch.rlœ Aebout (1956), ~s>domidtod for morc than two decades. F’~~w~’~eb~~tr~~d~l hats two obvious advantages: his describing the-locational choicea of residents in response to the amenities of communities (including public, expenditures and~taxes,), it appears to hav~reat exlylanatery power; and ~ implies 1B ma-rkvtae mechanism ~bi~h, ~ under ~~ai~a ~~~~~pt~c~~, ge~~~tes ~ ~’~~-~~t~~a ~ ~~~ati~~. ~-publk,goo0s. To be sure, actual conditions ~ic~~e t~ ~ ass~~