This paper extends the capitalization approach of Wallace E. Oates to consider supply adjustment in a local public goods market of the sort hypothesized by Charles M. Tiebout. It is shown that Oates's singleperiod cross-section analysis-demonstrated demand conditions approximated Tiebout's hypotheses in a situation in which supply was not in long-run equilibrium. Analysis of capitalization of taxes, school expenditures, and road maintenance expenditures over five successive census periods in the Boston area indicates a move toward equilibrium in the market for schooling, but not in all other markets for local public goods.