Economic theory suggests that intergovernmental grants are equivalent to private income. A large empirical literature, however, contradicts this prediction. A school finance reform in New Hampshire, where local public goods decisions are made by a form of direct democracy, provides an unusually compelling test of the theory. The results, which suggest that approximately ninety cents per grant dollar are spent on tax reduction, provide support for equivalence. The paper's findings have important policy implications for the financing of local public goods in general and for school finance reform in particular.

We document intracity spatial persistence and its causes. Streetcars dominated urban transit in Los Angeles County from the 1890s to the early 1910s, and were off the road entirely by 1963. However, we find that streetcars' influence remains readily visible in the current pattern of urban density and that this influence has not dissipated in the sixty years since the streetcar's removal. We examine land use regulation as both a consequence of streetcars and a mechanism for the persistent effect of streetcars. Our evidence suggests that the streetcar influences modern behavior through the mutually reinforcing pathways of regulation and agglomerative clustering.

This paper examines the residential location and school choice responses to the desegregation of large urban public school districts. We decompose the well documented decline in white public enrollment following desegregation into migration to suburban districts and increased private school enrollment, and find that migration was the more prevalent response. Desegregation caused black public enrollment to increase significantly outside of the South, mostly by slowing decentralization of black households to the suburbs, and large black private school enrollment declines in southern districts. Central district school desegregation generated only a small portion of overall urban population decentralization between 1960 and 1990.