Description:
<jats:p><jats:bold>ABSTRACT</jats:bold> We take advantage of an unusual natural experiment—a high‐quality 1920s subdivision split neatly in half by a central‐city/suburban boundary—to study the response over 30 years to the relative decline in the quality of central‐city services since the 1960s. As expected, a large sale price differential opens in the 1960s. Demographic characteristics are nevertheless similar across the boundary. Survey data indicate Tiebout sorting: the central city side attracts households who prefer alternatives to suburban public schools. Children attend parochial and public “magnet” schools. A neighborhood association supplements municipal services. Rigid service district boundaries inhibit closure of the house‐price differential.</jats:p>