The Effects Of Local Public Spending On Housing Prices: An Empirical Study Of Tiebout Model

Since the concept of public goods had been raised, it had become a very hot topic, such as the significance of the government, the character of public goods, supply efficiency on the economic community.Over a long time, people thought that in the supply of public goods three problems should pay attention to:1.How to show the preference of people. Using a method to know the real needs of public goods of residents.2.the problem of how the society do the choices.How they can achieve Pareto optimal on a non-authoritarian circumstances.3.The problems of supervision and management of public goods. How we can improve the efficiency and enthusiasm in the supply of public goods.The analysis of Tiebout model thinks that if the residents can move between communities, all the three issues can be resolved. If the community government can not provided public goods to residents efficiently who needs, the residents will be relocated to other community which can provider public goods to meet their preferences.So it can be form a competitive mechanism between communities which can lead to the effective allocation of community resources to Pareto optimal.This paper attempts to analyze the effects of local public spending on housing prices under the influence of the mechanism - voting with their feet with useing the oretical model analysis,investigation analysis combined with the theory and description a graphical illustration of combining research methods. The views of this paper are that the supply of public goods between communities and the number of different types of housing will be great impact on the price level;the green of surrounding,the status of environmental sanitation and community traffic conditions will significantly affect the price of housing in the community.But educational conditions,law and order situation and police with the number of people make mixing impaction in different people. The innovation of this paper is proving the balance of the prices of public goods and the housing prices in many communities accord Pareto optimal between the communities.At last, this paper proposes a new idea of controlling the real estate market - equalization of local public goods.