Applying the Hedonic Pricing Model to the Prices of Single-Family Homes in the Oldest U.S. City, St. Augustine, Florida, Testing Whether Property Taxes Are Capitalized into Housing Prices

Angjellari-Dajci, Fiorentina and Cebula, Richard (2014): Applying the Hedonic Pricing Model to the Prices of Single-Family Homes in the Oldest U.S. City, St. Augustine, Florida, Testing Whether Property Taxes Are Capitalized into Housing Prices.

Abstract

This empirical investigation applies a hedonic pricing model to determine whether property taxes have been capitalized into housing prices of single-family homes in city of St. Augustine, Florida housing market for single family homes. There were sufficient data in this context to study a total of 4,017 single-family houses for the six-year period from 2008 to 2013 period. The sales price and property tax levels are expressed real terms, i.e., in 2005 dollars. The semi-log estimation reveals, among other things, that the natural log of the real sales price of a single-family house in the St. Augustine area was in fact negatively affected by the city and county property tax level.

• Item Type: MPRA Paper
• Language: English
• Keywords: housing prices; property tax capitalization; market mechanism
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H71 - State and Local Taxation, Subsidies, and Revenue; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R38 - Government Policy

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