The effect of Walmart on the tax base: evidence from New Jersey
AbstractThis paper measures the impact of 30 Walmart openings on the municipal tax base using panel data for New Jersey municipalities from 1998-2007. We consider the impact of the new Walmart on the home municipality as well as the nearest adjacent municipality in the year the outlet opens as well as the two subsequent years. Because Walmart may exert differing effects on residential and non-residential values, we undertake separate analyses of the impact of Walmart on the residential and non-residential tax bases. We find that a new Walmart has a significant positive impact on the growth in the tax base in host municipalities the second year that it is open, but not in years one and three. In addition, the impact of the Walmart on the growth in the tax base depends on the size of the municipality. In the average-sized municipality, the real equalized tax base growth rate rises only about 0.35 percentage points in the second year. This effect is primarily the result of Walmart’s impact on residential values in the host municipality. By contrast, a new Walmart causes a modest but consistently negative effect on growth of the tax base in the adjacent municipality across all three years that we are able to measure. In the average sized municipality for our sample, the real equalized tax base growth rate falls rate falls 0.065, 0.081, and 0.096 percentage points, respectively. This effect occurs primarily through the Walmart’s impact on growth of non-residential values. The cumulative effect of this reduction in growth in the adjacent municipality is roughly two thirds of the increase in growth experienced by the home municipality.
Download InfoIf 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30937.
Date of creation: 16 May 2011
Date of revision:
Tax Base; Walmart; Retailing; Big Box;
Find related papers by JEL classification:
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
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.:
- Donald Vandegrift & Michael Lahr, 2011. "Open space, house prices, and the tax base," The Annals of Regional Science, Springer, vol. 46(1), pages 83-100, February.
- Jerry Hausman & Ephraim Leibtag, 2006.
"Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart,"
CeMMAP working papers
CWP06/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
- Jerry Hausman & Ephraim Leibtag, 2005. "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart," NBER Working Papers 11809, National Bureau of Economic Research, Inc.
- Hicks, Michael J., 2009. "Wal-Mart and Small Business: Boon or Bane?," The Review of Regional Studies, Southern Regional Science Association, vol. 39(1), pages 73-83.
- Srikanth Paruchuri & Joel A. C. Baum & David Potere, 2009. "The Wal-Mart Effect: Wave of Destruction or Creative Destruction?," Economic Geography, Clark University, vol. 85(2), pages 209-236, 04.
- David Neumark & Junfu Zhang & Stephen Ciccarella, 2006.
"The Effects of Wal-Mart on Local Labor Markets,"
060711, University of California-Irvine, Department of Economics.
- David Neumark & Junfu Zhang & Stephen Ciccarella, 2005. "The Effects of Wal-Mart on Local Labor Markets," NBER Working Papers 11782, National Bureau of Economic Research, Inc.
- Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2007. "The Effects of Wal-Mart on Local Labor Markets," IZA Discussion Papers 2545, Institute for the Study of Labor (IZA).
- Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
- John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
- Emek Basker, 2005.
"Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion,"
The Review of Economics and Statistics,
MIT Press, vol. 87(1), pages 174-183, February.
- Emek Basker, 2002. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Working Papers 0215, Department of Economics, University of Missouri, revised 14 Jan 2004.
- Emek Basker, 2003. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Labor and Demography 0303002, EconWPA, revised 11 Mar 2005.
- Michael J. Hicks & Kristy Wilburn, 2005. "The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," Urban/Regional 0511011, EconWPA.
- Georgeanne M. Artz & Kenneth E. Stone, 2006. "Analyzing the Impact of Wal-Mart Supercenters on Local Food Store Sales," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1296-1303.
- Michael J. Hicks, 2005. "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?," Public Economics 0511015, EconWPA.
- Stephan J. Goetz & Hema Swaminathan, 2006. "Wal-Mart and County-Wide Poverty," Social Science Quarterly, Southwestern Social Science Association, vol. 87(2), pages 211-226.
- Michael J Hicks, 2008. "Estimating Wal-Mart's Impacts in Maryland: A Test of Identification Strategies and Endogeneity Tests," Eastern Economic Journal, Palgrave Macmillan, vol. 34(1), pages 56-73, Winter.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.