[1] Tiebout first proposed the model informally as a graduate student in a seminar with Richard Musgrave, who argued that the free rider problem necessarily required a political solution.
Later, after obtaining his PhD, Tiebout fully described his hypothesis in a seminal article published in 1956 by the Journal of Political Economy.
The model holds that if municipalities offered varying baskets of goods (government services) at a variety of prices (tax rates), that people with different personal valuations of these services and prices would move from one local community to another which maximizes their personal utility.
Similar to how shopping and competition lead to efficiency in private good markets, this model holds that individual choices on where to live would lead to the equilibrium provision of local public goods in accordance with the tastes of residents, thereby sorting the population into optimum communities.
The primary assumptions are that consumers are free to choose their communities, can move freely (at no cost) across towns, have perfect information, and there is equal financing of public goods.
Further evidence comes from journalist Bill Bishop and sociologist and statistician Robert Cushing in their book The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart.
Bishop and Cushing present original data to demonstrate crucial ways in which Americans have shopped, voted with their feet, and effectively sorted themselves geographically, economically, and politically around the turn of the twentieth century.