IDEAS home Printed from https://ideas.repec.org/a/bla/ajecsc/v82y2023i4p365-375.html
   My bibliography  Save this article

An exploratory study of the impact of tax freedom on geographic living‐cost differentials

Author

Listed:
  • Richard J. Cebula
  • Christopher M. Duquette
  • G. Jason Jolley

Abstract

In the United States, there exist enormous geographic differentials in the cost of living. A sound, basic understanding of factors that influence such geographic living‐cost differentials is important to help formulate useful policies to address various contemporary economic and social problems such as public‐school funding across counties. In this exploratory study of the effects of tax freedom on geographic living‐cost differentials, the following hypothesis is investigated using panel data for the period 2009 through 2020. The higher the average overall freedom from taxation in a state in the forms of personal income taxation, property taxation, and sales taxation, the lower the overall cost of living in the state. In this exploratory study, strong empirical support is obtained for this heretofore effectively overlooked hypothesis.

Suggested Citation

  • Richard J. Cebula & Christopher M. Duquette & G. Jason Jolley, 2023. "An exploratory study of the impact of tax freedom on geographic living‐cost differentials," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(4), pages 365-375, July.
    • Handle: RePEc:bla:ajecsc:v:82:y:2023:i:4:p:365-375
    DOI: 10.1111/ajes.12525
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ajes.12525
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ajes.12525?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Timothy D. Hogan, 1984. "Determinants of Geographic Living-Cost Differentials in the United States: Comment," Land Economics, University of Wisconsin Press, vol. 60(1), pages 115-119.
    2. Foley, Maggie & Angjellari-Dajci, Fiorentina, 2015. "Net Migration Determinants," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(1).
    3. Edel, Matthew & Sclar, Elliott, 1974. "Taxes, Spending, and Property Values: Supply Adjustment in a Tiebout-Oates Model," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 941-954, Sept./Oct.
    4. Richard J. Cebula, 1980. "Determinants of Geographic Living-Cost Differentials in the United States: An Empirical Note," Land Economics, University of Wisconsin Press, vol. 56(4), pages 477-481.
    5. Paul K. Gatons & Richard J. Cebula, 1972. "Wage-Rate Analysis: Differentials and Indeterminacy," ILR Review, Cornell University, ILR School, vol. 25(2), pages 207-212, January.
    6. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    7. Walter W. McMahon, 1991. "Geographical Cost of Living Differences: An Update," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 426-450, September.
    8. John M. Quigley & Steven Raphael & Eugene Smolensky, 2001. "Homeless In America, Homeless In California," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 37-51, February.
    9. Donald Langston & David W. Rasmussen & James C. Simmons, 1985. "A Note on Geographic Living Cost Differentials," Land Economics, University of Wisconsin Press, vol. 64(3), pages 314-318.
    10. Stephen G. Cecchetti & Nelson C. Mark & Robert J. Sonora, 2002. "Price Index Convergence Among United States Cities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1081-1099, November.
    11. Richard J. Cebula & Malissa L. Davis, 2022. "Determinants of poverty in the US state of Virginia: an examination of the impact of rent (the neglected variable)," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 9(1), pages 818-830, December.
    12. Grimes, Paul W. & Chressanthis, George A., 1997. "Assessing the Effect of Rent Control on Homelessness," Journal of Urban Economics, Elsevier, vol. 41(1), pages 23-37, January.
    13. Thomas, Vinod, 1980. "Spatial differences in the cost of living," Journal of Urban Economics, Elsevier, vol. 8(1), pages 108-122, July.
    14. Winters, John V., 2009. "Wages and prices: Are workers fully compensated for cost of living differences?," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 632-643, September.
    15. Richard J. Cebula, 1978. "An Empirical Note on the Tiebout-Tullock Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(4), pages 705-711.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harrison S. Campbell, 2021. "Income and cost of living: Are less equal places more costly?," Social Science Quarterly, Southwestern Social Science Association, vol. 102(6), pages 2689-2705, November.
    2. Richard J. Cebula & Gigi M. Alexander, 2020. "Economic and Noneconomic Factors Influencing Geographic Differentials in Homelessness: An Exploratory State‐Level Analysis," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(2), pages 511-540, March.
    3. Rokicki, Bartlomiej & Blien, Uwe & Hewings, Geoffrey J.D. & thi Hong Van, Phan, 2021. "Is there a wage curve with regional real wages? An analysis for the US and Poland," Economic Modelling, Elsevier, vol. 102(C).
    4. Michael L. Walden, 1997. "How Much Income Variation "Really" Exists Within a State?," The Review of Regional Studies, Southern Regional Science Association, vol. 27(3), pages 237-250, Winter.
    5. Cebula, Richard J. & Alexander, Gigi M., 2006. "Determinants of Net Interstate Migration, 2000-2004," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(2), pages 1-8.
    6. Richard J. Cebula & Michael Toma, 2010. "Determinants of interstate differentials in the cost of housing, 2006," Applied Economics Letters, Taylor & Francis Journals, vol. 17(2), pages 153-157, January.
    7. Cebula, Richard & Toma, Michael, 2006. "Determinants of Interstate Differentials in the Real Median Price of Single Family Homes," MPRA Paper 61410, University Library of Munich, Germany.
    8. Richard J. Cebula & John Connaughton & Caroline Swartz, 2018. "An Empirical Analysis of the Impact of the Three Labor Market Freedom Indices and Occupational Licensing on Interstate Living-Cost Differentials," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Fall 2018), pages 49-62.
    9. Michael Raper, 1999. "Self-selection bias and cost-of-living estimates," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(1), pages 64-77, March.
    10. Wataru Suzuki, 2008. "What determines the spatial distribution of homeless people in Japan?," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1023-1026.
    11. Ohad Raveh, 2013. "Dutch Disease, factor mobility, and the Alberta Effect: the case of federations," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(4), pages 1317-1350, November.
    12. Early Dirk W. & Olsen Edgar O., 2002. "Subsidized Housing, Emergency Shelters, and Homelessness: An Empirical Investigation Using Data from the 1990 Census," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-36, August.
    13. Elissaios Papyrakis & Ohad Raveh, 2014. "An Empirical Analysis of a Regional Dutch Disease: The Case of Canada," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 179-198, June.
    14. Grodecka, Anna & Hull, Isaiah, 2019. "The Impact of Local Taxes and Public Services on Property Values," Working Paper Series 374, Sveriges Riksbank (Central Bank of Sweden).
    15. Stephen Malpezzi, "undated". "Hedonic Pricing Models: A Selective and Applied Review," Wisconsin-Madison CULER working papers 02-05, University of Wisconsin Center for Urban Land Economic Research.
    16. David S. Lucas, 2017. "The Impact of Federal Homelessness Funding on Homelessness," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 548-576, October.
    17. Irving Hoch, 1987. "City Size and US Urban Policy," Urban Studies, Urban Studies Journal Limited, vol. 24(6), pages 570-586, December.
    18. Maria Hanratty, 2017. "Do Local Economic Conditions Affect Homelessness? Impact of Area Housing Market Factors, Unemployment, and Poverty on Community Homeless Rates," Housing Policy Debate, Taylor & Francis Journals, vol. 27(4), pages 640-655, July.
    19. repec:kap:iaecre:v:11:y:2005:i:3:p:267-274 is not listed on IDEAS
    20. Corinth, Kevin, 2017. "The impact of permanent supportive housing on homeless populations," Journal of Housing Economics, Elsevier, vol. 35(C), pages 69-84.
    21. Early, Dirk W., 2005. "An empirical investigation of the determinants of street homelessness," Journal of Housing Economics, Elsevier, vol. 14(1), pages 27-47, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ajecsc:v:82:y:2023:i:4:p:365-375. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0002-9246 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.