TY  - JOUR
AU  - Gyourko,Joseph
AU  - Tracy,Joseph S.
TI  - On the Political Economy of Land Value Capitalization and Local Public Sector Rent-Seeking in a Tiebout Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1919
PY  - 1986
Y2  - May 1986
UR  - http://www.nber.org/papers/w1919
L1  - http://www.nber.org/papers/w1919.pdf
N1  - Author contact info:
Joseph Gyourko
University of Pennsylvania
Wharton School of Business
3620 Locust Walk
1480 Steinberg-Dietrich Hall
Philadelphia, PA 19104-6302
Tel: 215/898-3003
Fax: 215/573-2220
E-Mail: gyourko@wharton.upenn.edu

Joseph Tracy
Executive Vice President
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-6344
E-Mail: joseph.tracy@ny.frb.org
AB  - In this paper we examine the political economy. of capitalization in a Tiebout model when there is a rent-seeking public bureaucracy. A new approach is suggested for testing for the influence of successful local public sector rent-seeking on local property values. We present empirical evidence showing that property values are lower in cities which pay their public sector workers significantly more than similar public sector workers earn in other cities. Finally, we discuss how the regulatory process can be used to distribute rents arising from a short-run Tiebout disequilibrium to landowners, public sector workers, and renters.
ER  -