The Influence of Population Change on Municipal Fiscal Policy

151 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1987.Previous research provides two basic explanations for changes in municipal fiscal behavior. The incremental approach suggests that current fiscal behavior is primarily a function of past fiscal policy. The deterministic or utility-maximizing approach argues that fiscal behavior is influenced by a variety of factors including the characteristics of the local population. The purpose of this research is to determine how changes in the demographic characteristics of a municipality influence local fiscal policy. A model utilizing demographic process and component variables, situational factors, and past fiscal policy characteristics is developed to explain changes in four current fiscal policy variables. Temporally lagged and concurrent measures of the demographic variables are implemented to examine the delayed effects of population on policy. The model is tested utilizing two stage ordinary least squares regression on a sample of sixty-seven United States cities with populations greater than 50,000. The empirical results illustrate that population factors do generate changes in municipal fiscal behavior. The greatest influence is demonstrated by disaggregated population process and component variables such as migration rates, population age structure, and per capita income. Situational factors such as city type and region are also influential. Past fiscal policy characteristics provide little explanatory power suggesting that changes in municipal fiscal policy are the result of more complex process than that suggested by the incremental approach.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD