Community composition and the provision of local public goods: the case of occupancy status

Abstract

A public finance framework is used to examine the relationship between community composition, namely occupancy status, and the provision of governmental services. A comprehensive literature survey suggests that a systematic relationship exists between the fraction of renters in a given jurisdiction and the level of fiscal expenditures. More particularly, it would appear that renters ceteris paribus are willing to support a higher level of publicly provided goods than homeowners. The competing hypotheses of renter illusion and renter rationality are discussed, as are the differing implications for public policy. Suggestions are also made on how future research on this important topic might proceed.