Tiebout and the Tebow State

Charles Tiebout wrote an article titled "A Pure Theory of Local Expenditures."  Tim Tebow was a National Championship and Heisman Trophy winner at the University of Florida.  Last year, Florida had the largest positive net migration in the US among states.  In his writing, Tiebout focused mainly on migration and government expenditure structures in smaller sizes, and we are looking to apply this to a state level.  Interestingly, some of Tiebout's assumptions do not hold true, making this large migration even more significant.

If Florida won the migration game, California lost it: the former gained ~300,000 people while the latter lost roughly the same.  While there are people from other states in these numbers (including one of the best quantitative hedge funds in the world moving from Chicago to Miami), comparing the two generates interesting results.  To start, California is known as a blue state, and Florida is known as a red state.  The two governors clash on issues like transgender policy, immigration, and corporate governance.  In regards to Tiebout's work, the tax structure is different: California's income tax rate over $1,000,000 is 13.3%, while Florida's is, well, 0%.  While I'm not a statistician, I would argue that the movement of that many people out of California and the same amount (although not necessarily the same people) into Florida is in some way significant and that when reviewing their state government, at least when compared to before, people see more benefits to living in Florida and less to doing so in California.  

In his writing, Tiebout assumes no costs in moving: in reality there are extreme costs.  These are part of the personal calculus of moving, and still overcome by the perceived change in benefits.  Wages in California are much higher, but this may be attributable to a higher minimum wage and may be canceled out by a higher cost of living.  California has been known as the place for young people and growth (watch the show Silicon Valley or the movie The Social Network).  Now, there's a bestselling book detailing the failures of the third largest city in California.  Migration data give us insight into how people review their government (with limitations), and the recent data help us define and decipher how the American population views our states.