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Intra-school district capitalization of property tax rates

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  • Livy, Mitchell R.

Abstract

While previous studies have attempted to measure property tax rate capitalizations by proximate housing prices, disentangling school quality, and its associated amenities, from tax rates has impeded accurate estimation. I overcome this issue by investigating school districts containing varying tax rates. Identification is derived from the use of school and spatial-temporal boundary fixed effects to eliminate unobserved variation associated with tax districts that can confound capitalization estimates. Results from the primary model provide evidence of a negative capitalization of tax rate levels that corresponds to full capitalization at discount rate of nearly 3.5 percent. Further, property fixed effects are uniquely incorporated within the boundary identification method to show that tax rate changes are capitalized similar to baseline tax rate differences.

Suggested Citation

  • Livy, Mitchell R., 2018. "Intra-school district capitalization of property tax rates," Journal of Housing Economics, Elsevier, vol. 41(C), pages 227-236.
    • Handle: RePEc:eee:jhouse:v:41:y:2018:i:c:p:227-236
    DOI: 10.1016/j.jhe.2018.06.008
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    Cited by:

    1. Giertz, Seth H. & Ramezani, Rasoul & Beron, Kurt J., 2021. "Property tax capitalization, a case study of Dallas County," Regional Science and Urban Economics, Elsevier, vol. 89(C).
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    3. Andrew Hanson, 2021. "Taxes and Economic Development: An Update on the State of the Economics Literature," Economic Development Quarterly, , vol. 35(3), pages 232-253, August.

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    More about this item

    Keywords

    Property tax capitalization; Housing prices; Regression discontinuity;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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