Private Schooling and the Tiebout Hypothesis

This article develops an alternative to both the capitalization and the “heterogeneity” tests of the Tiebout hypothesis. By examining the implication that the greater the degree of public school choice in a metro area the lesser should be the reliance on private schooling, additional and novel support is found for the hypothesis. Specifically, interjurisdictional choice linked to the number of school districts, and intrajurisdictional choice as reflected by the number of individual schools per district both were found to be important dimensions of school choice. That the Tiebout process is operational at the SMSA level of aggregation also suggests that the net fiscal gains from mobility are relevant to both central city and suburban dwellers.