Göbel, Jürgen (2009): Local policy, income, and housing prices.
Download (112kB) | Preview
In a local economy, the citizens can react on local policy by exit. Exit induces a shift in the housing demand. The local policy may thus capitalize into the housing prices. However, the citizens encounter specific coordination problems on the housing market. Therefore, it may be asked how effective their exit option is. To answer this question, we work with a sample of 234 U.S. counties, from 2002 and 2003. Our empirical analysis shows that the property tax revenue is the local fiscal variable which has the strongest connection with the housing prices. In contradiction to the general theory, this connection is positive and indirect. The essential element within this connection is the personal income.
|Item Type:||MPRA Paper|
|Original Title:||Local policy, income, and housing prices|
|Keywords:||local policy; exit; housing price; capitalization|
|Subjects:||H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H72 - State and Local Budget and Expenditures
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand
|Depositing User:||Juergen Goebel|
|Date Deposited:||14. Mar 2009 06:48|
|Last Modified:||12. Feb 2013 20:36|
Bloom, Howard S./ Ladd, Helen F./ Yinger, John (1983): ”Are Property Taxes Capitalized into House Values?” in: Zodrow, G. R. (ed.): ”Local Provision of Public Services: The Tiebout-Model after Twenty-Five Years,” Academic Press, ch. 7, 145-63.
Church, Albert M. (1974): ”Capitalization of the Effective Property Tax Rate on Single Family Residences,” National Tax Journal, 27(1), 113-22.
Edel, Matthew/ Sclar, Elliott (1974): ”Taxes, Spending, and Property Values: Supply Adjustment in a Tiebout-Oates Model,” Journal of Political Economy, 82(5), 941-54.
Goodman, Allen C. (1983): ”Capitalization of Property Tax Differentials Within and Among Municipalities,” Land Economics, 59(2), 211-9.
Greene, William H. (2000): ”Econometric Analysis,” Prentice Hall.
Gronberg, Timothy J. (1979): ”The Interaction of Markets in Housing and Local Public Goods: A Simultaneous Equations Approach,” Southern Economic Journal, 39(10), 445-59.
Guilfoyle, Jeffrey P. (2000): ”The Effect of Property Taxes on Home Values,” Journal of Real Estate Literature, 8(2), 111-27.
Hamilton, Bruce W. (1975): ”Zoning and Property Taxation in a System of Local Governments,” Urban Studies, 12(2), 205-11.
Hoxby, Caroline M. (1999): ”The productivity of schools and other local public goods producers,” Journal of Public Economics, 74, 1-30.
Hoyt, William H./ Rosenthal, Stuart S. (1997): ”Household Location and Tiebout: Do Families Sort According to Preferences for Locational Amenities?” Journal of Urban Economics, 42, 159-78.
Hwang, Min/ Quigley, John M. (2006): ”Economic Fundamentals in Local Housing Markets: Evidence from U.S. Metropolitan Regions,” Journal of Regional Science, 46(3), 425-53.
King, A. Thomas (1977): ”Estimating Property Tax Capitalization: A Critical Comment,” Journal of Political Economy, 85(2), 425-31.
Lusht, Kenneth M. (1997): ”Real estate valuation: principles and applications,” Irwin.
Mueller, Dennis C. (2003): ”Public Choice III,” Cambridge University Press.
Netzer, Dick (1966): ”Economics of the property tax,” Washington, D.C.
Oates, Wallace E. (1969): ”The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis,” Journal of Political Economy, 77, 957-71.
Oates, Wallace E. (1973): ”The Effects of Property Taxes and Local Public Spending on Property Values: A Reply and Yet Further Results,” Journal of Political Economy, 81(4), 1004-8.
O’Sullivan, Arthur (2003): ”Urban Economics,” McGraw-Hill.
Pollakowski, Henry O. (1973): ”The Effects of Property Taxes and Local Public Spending on Property Values: A Comment and Further Results,” Journal of Political Economy, 81, 994-1003.
Quigley, John M. (1985): ”Consumer choice of dwelling, neighborhood and public services,” Regional Science and Urban Economics, 15, 41-63.
Rosen, Harvey S./ Fullerton, David S. (1977): ”A Note on Local Tax Rates, Public Benefit Levels, and Property Value,” Journal of Political Economy, 85(2), 433-40.
Tiebout, Charles M. (1956): ”A Pure Theory of Local Expenditures,” Journal of Political Economy, 64(5), 416-24.
U.S. Bureau of the Census (2004): ”Compendium of Public Employment: 2002,” 3, Washington, D.C.
U.S. Bureau of the Census (2005)] ”Compendium of Government Finances: 2002,” 4(5), Washington, D.C.
U.S. Bureau of the Census (2006): ”2002 American Community Survey,” Washington, D.C.
U.S. Bureau of the Census (2006): ”2003 American Community Survey,” Washington, D.C.
Wales, T. J./ Wiens, E. G. (1974): ”Capitalization of Residential Property Taxes: An Empirical Study,” Review of Economics and Statistics, 56(3), 329-33.