Advanced Search
MyIDEAS: Login to save this article or follow this journal

The effect of property taxes on vacation home growth rates: Evidence from Michigan

Contents:

Author Info

  • Johnson, Erik
  • Walsh, Randall
Registered author(s):

    Abstract

    The Tiebout model assumes that individuals sort to the jurisdiction which best matches their fiscal preferences. However, there is a paucity of reliable estimates for the impact of tax changes on household mobility. We utilize a state mandated school finance reform and temporal differences in vacation home densities to provide a unique test of this fundamental Tiebout assumption. The results show that changes in property taxes explain a significant amount of the variation in vacation home growth; a 3–4mil decrease in property tax rates is associated with an increase of approximately one vacation home per square kilometer.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S0166046213000550
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Regional Science and Urban Economics.

    Volume (Year): 43 (2013)
    Issue (Month): 5 ()
    Pages: 740-750

    as in new window
    Handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:740-750

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/regec

    Related research

    Keywords: Tiebout sorting; Property taxation;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2006. "Urban growth and housing supply," Journal of Economic Geography, Oxford University Press, vol. 6(1), pages 71-89, January.
    2. William Duncombe & Mark Robbins & Douglas A. Wolf, 2003. "Place Characteristics and Residential Location Choice Among the Retirement-Age Population," Journals of Gerontology: Series B, Gerontological Society of America, vol. 58(4), pages S244-S252.
    3. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
    4. Henderson, J Vernon, 1980. "Community Development: The Effects of Growth and Uncertainty," American Economic Review, American Economic Association, vol. 70(5), pages 894-910, December.
    5. Conway, Karen Smith & Rork, Jonathan C., 2012. "No Country For Old Men (Or Women) — Do State Tax Policies Drive Away The Elderly?," National Tax Journal, National Tax Association, vol. 65(2), pages 313-56, June.
    6. Cebula, Richard, 2001. "Migration and the Tiebout-Tullock Hypothesis Revisited," MPRA Paper 52413, University Library of Munich, Germany.
    7. Skidmore, Mark & Ballard, Charles L. & Hodge, Timothy R., 2010. "Property Value Assessment Growth Limits And Redistribution Of Property Tax Payments: Evidence From Michigan," National Tax Journal, National Tax Association, vol. 63(3), pages 509-37, September.
    8. Byron F. Lutz, 2009. "Fiscal amenities, school finance reform and the supply side of the Tiebout market," Finance and Economics Discussion Series 2009-18, Board of Governors of the Federal Reserve System (U.S.).
    9. Epple, Dennis & Ferreyra, Maria Marta, 2008. "School finance reform: Assessing general equilibrium effects," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1326-1351, June.
    10. Henderson, J Vernon, 1985. "The Tiebout Model: Bring Back the Entrepreneurs," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 248-64, April.
    11. Conway, Karen Smith & Houtenville, Andrew J., 2001. "Elderly Migration and State Fiscal Policy: Evidence from the 1990 Census Migration Flows," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 103-24, March.
    12. Farnham, Martin & Sevak, Purvi, 2006. "State fiscal institutions and empty-nest migration: Are Tiebout voters hobbled?," Journal of Public Economics, Elsevier, vol. 90(3), pages 407-427, February.
    13. Conway, Karen Smith & Houtenville, Andrew J, 1998. " Do the Elderly "Vote with Their Feet"?," Public Choice, Springer, vol. 97(4), pages 663-85, December.
    14. Anderson, Nathan B., 2006. "Beggar Thy Neighbor? Property Taxation of Vacation Homes," National Tax Journal, National Tax Association, vol. 59(4), pages 757-80, December.
    15. Papke, Leslie E., 2005. "The effects of spending on test pass rates: evidence from Michigan," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 821-839, June.
    16. Maria Marta Ferreyra, 2009. "An Empirical Framework for Large-Scale Policy Analysis, with an Application to School Finance Reform in Michigan," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 147-80, February.
    17. Hui Shan, 2008. "Property taxes and elderly mobility," Finance and Economics Discussion Series 2008-50, Board of Governors of the Federal Reserve System (U.S.).
    18. Courant, Paul N & Gramlich, Edward M & Loeb, Susanna, 1995. "Michigan's Recent School Finance Reforms: A Preliminary Report," American Economic Review, American Economic Association, vol. 85(2), pages 372-77, May.
    19. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
    20. Papke, Leslie E. & Wooldridge, Jeffrey M., 2008. "Panel data methods for fractional response variables with an application to test pass rates," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 121-133, July.
    21. Karen Smith Conway & Andrew J. Houtenville, 2003. "Out with the Old, In with the Old: A Closer Look at Younger Versus Older Elderly Migration," Social Science Quarterly, Southwestern Social Science Association, vol. 84(2), pages 309-328.
    22. Cebula, Richard, 1973. "Interstate Migration and the Tiebout Hypothesis: An Analysis According to Race, Sex, and Age," MPRA Paper 49827, University Library of Munich, Germany, revised 01 Feb 1974.
    23. Conway, Karen Smith & Rork, Jonathan C., 2006. "State "Death" Taxes and Elderly Migration—The Chicken or the Egg?," National Tax Journal, National Tax Association, vol. 59(1), pages 97-128, March.
    24. Anderson, Nathan B., 2011. "No relief: Tax prices and property tax burdens," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 537-549.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:740-750. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.