Do you think that smaller communities in the real world do have different levels and types of public expenditures, and can you give a specific example?
I assume that you are asking about Charles Tiebout’s classic article from 1956 that is entitled “A Pure Theory of Local Expenditures.” You have asked other questions about that article and the content of this question makes sense in that context. I will answer on the basis of this assumption.
In the article. Tiebout sets up a model in which “consumer-voters” are able to express their preference for various levels of public services and taxation. They do so by moving from locality to locality based on the services and taxes in the various places. This idea depends on the assumption that different small towns do have different levels of services.
In the real world, this is somewhat true, though it is much harder to be aware of the differences than Tiebout would suggest. When there are differences in the number of police officers per capita, for example, it is very hard for the public to notice. What is easier to notice is large amenities. To give a specific example, the small towns of Pullman, WA and Moscow, ID are about 8 miles apart. Pullman has an indoor swimming pool run by the city so people can swim year-round. Moscow does not have an indoor public pool, but it does have an outdoor water park with water slides and other such amenities. This would be an example of two small towns with some difference in the public services they provide.