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Does Tax Increment Financing Pass the “But-for†Test in Missouri?

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  • Ahmed Rachid El-Khattabi
  • T. William Lester

Abstract

The use of tax increment financing (TIF) remains a popular, yet highly controversial, tool among policy makers in their efforts to promote economic development. This study conducts a comprehensive assessment of the effectiveness of Missouri’s TIF program, specifically in Kansas City and St. Louis, in creating economic opportunities. We build a time-series data set starting 1990 through 2012 of detailed employment levels, establishment counts, and sales at the census block-group level to run a set of difference-in-differences with matching estimates for the impact of TIF at the local level. Although we analyze the impact of TIF on a wide set of indicators and across various industry sectors, we find no conclusive evidence that the TIF program in either city has a causal impact on key economic development indicators.

Suggested Citation

  • Ahmed Rachid El-Khattabi & T. William Lester, 2019. "Does Tax Increment Financing Pass the “But-for†Test in Missouri?," Economic Development Quarterly, , vol. 33(3), pages 187-202, August.
    • Handle: RePEc:sae:ecdequ:v:33:y:2019:i:3:p:187-202
    DOI: 10.1177/0891242419859097
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    References listed on IDEAS

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    Cited by:

    1. Kim, Donghyuk, 2023. "Economic spillovers and political payoffs in government competition for firms: Evidence from the Kansas City Border War," Journal of Public Economics, Elsevier, vol. 224(C).
    2. Czurylo, Todd, 2023. "The effect of tax increment financing districts on job creation in Chicago," Journal of Urban Economics, Elsevier, vol. 134(C).

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