Public Goods, Taxes, and Takings
AbstractBlume, Rubinfeld, and Shapiro (1984) first showed that compensation for takings can lead to a moral hazard problem that results in overinvestment in land suitable for public use. To the contrary, this paper shows that the compensation rule is irrelevant regarding the level of investment landowners make in their property, as well as the amount of land they authorize the government to acquire, both of which will be efficient. Intuitively, landowners recognize the equivalence of taxes and takings in budgetary terms, causing the distortionary effects of compensation and property taxation to cancel each other out through the balanced budget condition.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2007-02.
Length: 18 pages
Date of creation: Feb 2007
Date of revision:
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Postal: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063
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More information through EDIRC
Compensation for takings; eminent domain; moral hazard; public goods;
Other versions of this item:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
- NEP-LAW-2007-02-24 (Law & Economics)
- NEP-PBE-2007-02-24 (Public Economics)
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.:
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- Thomas J. Miceli & Kathleen Segerson, 2011. "Regulatory Takings," Working papers 2011-16, University of Connecticut, Department of Economics.
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