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Urban Sprawl and the Property Tax

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Author Info
Jan Brueckner ()
Hyun-A Kim ()

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Abstract

This paper explores the connection between the property tax and urban sprawl. While the tax's depressing effect on improvements reduces population density, spurring the spatial expansion of cities, a countervailing effect from lower dwelling sizes may dominate, raising densities and making cities smaller. The analysis shows that this latter outcome is guaranteed under CES preferences when the elasticity of substitution σ is high. But numerical results for the Leontief case (where σ is zero) suggest that the property tax encourages urban sprawl when substitution between housing and other goods is low. Thus, the distortions generated by the property tax may include inefficient spatial expansion of cities, suggesting the tax may belong on the list of causal factors identified by critics of urban sprawl. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1022260512147
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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 10 (2003)
Issue (Month): 1 (January)
Pages: 5-23
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Handle: RePEc:kap:apfinm:v:10:y:2003:i:1:p:5-23

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Web page: http://springerlink.metapress.com/link.asp?id=102851

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Related research
Keywords: urban sprawl; property tax;

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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.:
  1. Bentick, Brian L, 1979. "The Impact of Taxation and Valuation Practices on the Timing and Efficiency of Land Use," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 859-68, August. [Downloadable!] (restricted)
  2. LeRoy, Stephen F., 1976. "Urban land rent and the incidence of property taxes," Journal of Urban Economics, Elsevier, vol. 3(2), pages 167-179, April. [Downloadable!] (restricted)
  3. Arnott, Richard J. & MacKinnon, James G., 1977. "The effects of the property tax: A general equilibrium simulation," Journal of Urban Economics, Elsevier, vol. 4(4), pages 389-407, October. [Downloadable!] (restricted)
    Other versions:
  4. Wheaton, William C., 1974. "A comparative static analysis of urban spatial structure," Journal of Economic Theory, Elsevier, vol. 9(2), pages 223-237, October. [Downloadable!] (restricted)
  5. Sullivan, Arthur M., 1985. "The general-equilibrium effects of the residential property tax: Incidence and excess burden," Journal of Urban Economics, Elsevier, vol. 18(2), pages 235-250, September. [Downloadable!] (restricted)
  6. Carlton, Dennis W., 1981. "The spatial effects of a tax on housing and land," Regional Science and Urban Economics, Elsevier, vol. 11(4), pages 509-527, November. [Downloadable!] (restricted)
  7. Anderson, John E., 1986. "Property taxes and the timing of urban land development," Regional Science and Urban Economics, Elsevier, vol. 16(4), pages 483-492, November. [Downloadable!] (restricted)
  8. Brueckner, Jan K & Fansler, David A, 1983. "The Economics of Urban Sprawl: Theory and Evidence on the Spatial Sizes of Cities," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 479-82, August. [Downloadable!] (restricted)
  9. Pines, David & Sadka, Efraim, 1986. "Comparative statics analysis of a fully closed city," Journal of Urban Economics, Elsevier, vol. 20(1), pages 1-20, July. [Downloadable!] (restricted)
  10. Brueckner, Jan K., 1997. "Infrastructure financing and urban development:: The economics of impact fees," Journal of Public Economics, Elsevier, vol. 66(3), pages 383-407, December. [Downloadable!] (restricted)
  11. Wheaton, William C., 1998. "Land Use and Density in Cities with Congestion," Journal of Urban Economics, Elsevier, vol. 43(2), pages 258-272, March. [Downloadable!] (restricted)
  12. Brueckner, Jan K., 1987. "The structure of urban equilibria: A unified treatment of the muth-mills model," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 20, pages 821-845 Elsevier. [Downloadable!] (restricted)
  13. Mayo, Stephen K., 1981. "Theory and estimation in the economics of housing demand," Journal of Urban Economics, Elsevier, vol. 10(1), pages 95-116, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Alex Anas, 2003. "Taxes on Buildings and Land in a Dynamic Model of Real Estate Markets," Urban/Regional 0302004, EconWPA. [Downloadable!]
  2. Julia Lechner & Gunther Maier, 2009. "Sprawl or No Sprawl? - A Quantitative Analysis for the City of Vienna," SRE-Disc sre-disc-2009_03, Department of City and Regional Development, Vienna University of Economics and Business Administration. [Downloadable!]
  3. Jan K. Brueckner, 2003. "Transport Subsidies, System Choice, and Urban Sprawl," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Song, Yan & Zenou, Yves, 2005. "Property Tax and Urban Sprawl: Theory and Implications for U.S. Cities," Working Paper Series 648, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  5. Albert Solé-Ollé & Miriam Hortas Rico, 2008. "Does urban sprawl increase the costs of providing local public services? Evidence from Spanish municipalities," Working Papers 2008/6, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  6. Cho, Seong-Hoon & Kim, SeungGyu & Roberts, Roland K., 2009. "Measuring the Effects of a Land Value Tax on Land Development," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46760, Southern Agricultural Economics Association. [Downloadable!]
  7. Cho, Seong-Hoon & Lambert, Dayton M. & Roberts, Roland K. & Kim, Seung Gyu, 2008. "Moderating Urban Sprawl through Land Value Taxation," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6150, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  8. Song, Yan & Zenou, Yves, 2008. "How Differences in Property Taxes within Cities Affect Urban Sprawl?," CEPR Discussion Papers 6842, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Saku Aura & Thomas Davidoff, 2005. "Optimal Commodity Taxation when Land and Structures must be Taxed at the Same Rate," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  10. Matthias Cinyabuguma & Virginia McConnell, 2009. "Urban Growth Externalities and Neighborhood Incentives: Another Cause of Urban Sprawl?," UMBC Economics Department Working Papers 09-106, UMBC Department of Economics. [Downloadable!]
  11. John Deskins & William Fox, 2008. "Measuring Behavioral Responses to the Property Tax," International Studies Program Working Paper Series, at AYSPS, GSU paper0816, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  12. Paul Cheshire & Stephen Sheppard, 2002. "Taxes Versus Regulation: The Welfare Impacts of Policies for Containing Sprawl," Department of Economics Working Papers 193, Department of Economics, Williams College. [Downloadable!]
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