Tiebout Revisited: Redrawing Jurisdictional Boundaries

Central city households who subsidize local public sector goods through local property taxes have an incentive to flee from the city or to change the jurisdiction's boundary. We focus on the latter case, a neighborhood's attempt to deannex from a central city and subsequently annex to a suburb. The difficult theoretical problem is to explain why a large percentage of central city voters supported the deannexation proposal, most apparently becoming worse off if the issue was approved. While no explanation is consistent with fully rational voters, it appears that high property value owning voters supported the attempt in hope of being part of the next wave of deannexers.