Household Location and Tiebout: Do Families Sort According to Preferences for Locational Amenities?

William H. Hoyt, Stuart S. Rosenthal

Research output: Contribution to journalArticle

29 Scopus citations

Abstract

If households sort efficiently across locations, then at a given location families receive the same marginal benefit from the locational amenities. We test for such sorting by imposing cross-equation restrictions on hedonic regressions that difference away location- versus house-specific effects. Estimates are obtained using a unique subset of the American Housing Survey in which adjacent housing units are grouped together and observed in both 1985 and 1989. Rejection of the cross-equation restrictions unambiguously implies an inefficient sorting of households. In contrast, the data support the cross-equation restrictions which is a necessary but not sufficient condition for efficient sorting.

Original languageEnglish (US)
Pages (from-to)159-178
Number of pages20
JournalJournal of Urban Economics
Volume42
Issue number2
DOIs
StatePublished - Sep 1 1997
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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