In this paper, Tiebout theorizes that it is possible for every person's preferences to be different and therefore the number of communities could equal the population making each person his own municipal government which he uses to show, although potentially impractical, the starting point from which we can base the model.
- Consumer-voters are fully mobile and will move to that community where their preference patterns, which are set, are best satisfied.
- Consumer-voters are assumed to have full knowledge of differences among revenue and expenditure patterns and to react to these differences.
- There are a large number of communities in which the consumer-voters may choose to live.
- Restrictions due to employment opportunities are not considered. It may be assumed that all persons are living on dividend income
- The public services supplied exhibit no external economies or diseconomies between communities
- For every pattern of community services set by, say, a city manager who follows the preferences of the older residents of the community, there is an optimal community size.
- Communities below the optimum size seek to attract new residents to lower average costs. Those above optimum sizes do just the opposite. Those at an optimum try to keep their population constant.
Tiebout compared the public consumption model with the private sector model using a city manager as the proxy for purchasing and those purchases are made in bundles and this model is indeed no different to the private sector. The city manager is replaced with a broker or purchasing manager and the demand for goods for each community is measured.
Collective consumption goods (Samuelson) \[X_n +1,...,X_n +n\] Simultaneously \[X_n +j =X^i_n +j\] for each and every ith individual and collective good.
n Demand for local public goods
i, j communities
m Number of city managers
m+n demand for public goods
Tiebout calls the reduction of the simplistic model trite as it reduces down to each person being their own municipality. However, in order for each own municipality to exist there has to be a measure by which we can define a municipality of. This measure, is, of course, the only solution to this land. Later in Smallism we will see how home ownership is very important to the fundamental basis of a Smallism society.
Related to Smallism
Because Smallism does exactly as Tiebout theorizes by using the starting point of The Individual and working up to national infrastructure.