TIEBOUT REVISITED - REDRAWING JURISDICTIONAL BOUNDARIES

Central city households who subsidize local public sector goods throug h local property taxes have an incentive to flee from the city or to c hange the jurisdiction's boundary. We focus on the latter case, a neig hborhood's attempt to deannex from a central city and subsequently ann ex to a suburb. The difficult theoretical problem is to explain why a large percentage of central city voters supported the deannexation pro posal most apparently becoming worse off if the issue was approved. Wh ile no explanation is consistent with fully rational voters, it appear s that high property value owning voters supported the attempt in hope of being part of the next wave of deannexers. (C) 1997 Academic Press .