Tiebout Sorting and Selective Satisfaction with Urban Public Services: Testing the Variance Hypothesis

A key implication of the Tiebout model concerns variation in satisfaction within urban areas, with Tiebout arguing that fragmented settings should better match varied tastes with varied services, thereby producing less variance than would be observed under a consolidating government providing standardized service. But Tiebout’s expectations might be satisfied for only a subset of salient services. Alternatively, the social stratification/government inequality thesis suggests that preferences are not especially varied, but access to housing markets is, leading to greater variations in satisfaction under fragmented governments. The authors test these expectations with matched comparisons of variations in mean satisfaction levels for 11 local services in consolidated and fragmented settings and find strong support for the last view.