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Local response to fiscal incentives in heterogeneous communities

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  • Rockoff, Jonah E.
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    Abstract

    I examine the impact of a property tax-relief program in New York State that lowered the marginal cost of school expenditure to homeowners. I find that a typical school district, which received 20% of its revenue through the program in the school year 2001-2002, raised expenditure by 4.1% and local property taxes by 6.8% in response to the program. I then examine how the preferences of various groups of local taxpayers affect educational spending by identifying systematic variation across districts in the response to fiscal incentives. These results support the hypothesis that homeowners are more influential on local expenditure decisions than renters, owners of second homes, or owners of non-residential property.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Urban Economics.

    Volume (Year): 68 (2010)
    Issue (Month): 2 (September)
    Pages: 138-147

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    Handle: RePEc:eee:juecon:v:68:y:2010:i:2:p:138-147

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    Web page: http://www.elsevier.com/locate/inca/622905

    Related research

    Keywords: Property taxation Fiscal federalism School expenditure;

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    Cited by:
    1. Kakamu, Kazuhiko & Yunoue, Hideo & Kuramoto, Takashi, 2014. "Spatial patterns of flypaper effects for local expenditure by policy objective in Japan: A Bayesian approach," Economic Modelling, Elsevier, Elsevier, vol. 37(C), pages 500-506.
    2. Anderson, Nathan B., 2012. "Market value assessment and idiosyncratic tax-price risk: Understanding the consequences of alternative definitions of the property tax base," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(4), pages 545-560.
    3. Anderson, Nathan B., 2011. "No relief: Tax prices and property tax burdens," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 41(6), pages 537-549.

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