Speaking Falsehoods to Power: States' Misguided Use of 'Cost-of-Doing-Business' Studies in Economic Development Policy
Economic developers at the local and state levels have increasingly used cost-of-doing-business studies to compare their jurisdictions against others. The cost of doing business is enormously difficult to demonstrate in practice because: (1) there are many different types of business costs, many of which are difficult to measure; (2) in making their location choices, businesses take into account more than direct cost differences; and (3) businesses often behave in a dynamic way and either change how they operate to accommodate cost increases or accept some high costs if there are compensating lower costs or benefit payoffs in a particular location. This paper shows that the data and methods used in typical cost-of-doing-business studies are flawed and incomplete and therefore the implications of the studies are misleading.
References listed on IDEAS
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.:
- Wayne B. Gray, 1997.
"Manufacturing Plant Location: Does State Pollution Regulation Matter?,"
NBER Working Papers
5880, National Bureau of Economic Research, Inc.
- Wayne B Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," Working Papers 97-8, Center for Economic Studies, U.S. Census Bureau.
- Papke, Leslie E., 1991. "Interstate business tax differentials and new firm location : Evidence from panel data," Journal of Public Economics, Elsevier, vol. 45(1), pages 47-68, June.
- Leslie E. Papke, 1989. "Interstate Business Tax Differentials and New Firm Location: Evidence from Panel Data," NBER Working Papers 3184, National Bureau of Economic Research, Inc.
- Schmenner, Roger W. & Huber, Joel C. & Cook, Randall L., 1987. "Geographic differences and the location of new manufacturing facilities," Journal of Urban Economics, Elsevier, vol. 21(1), pages 83-104, January.
- Love, Lisa L. & Crompton, John L., 1999. "The Role of Quality of Life in Business (Re)Location Decisions," Journal of Business Research, Elsevier, vol. 44(3), pages 211-222, March.
- Paul D. Gottlieb, 1994. "Amenities as an Economic Development Tool: Is there Enough Evidence?," Economic Development Quarterly, , vol. 8(3), pages 270-285, August.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
- Michael E. Porter, 2000. "Location, Competition, and Economic Development: Local Clusters in a Global Economy," Economic Development Quarterly, , vol. 14(1), pages 15-34, February.
- Ronald C. Fisher, 1997. "Effects of state and local public services on economic development," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 53-82.
- Edward L. Glaeser, 2001. "The Economics of Location-Based Tax Incentives," Harvard Institute of Economic Research Working Papers 1932, Harvard - Institute of Economic Research.
- Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49.
- Henk Folmer & Tim Jeppesen & John List, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Natural Field Experiments 00511, The Field Experiments Website.
- Margaret E. Dewar, 1998. "Why State and Local Economic Development Programs Cause so Little Economic Development," Economic Development Quarterly, , vol. 12(1), pages 68-87, February.
- Todd M. Gabe & Kathleen P. Bell, 2004. "Tradeoffs between Local Taxes and Government Spending as Determinants of Business Location," Journal of Regional Science, Wiley Blackwell, vol. 44(1), pages 21-41.
- Katharine L. Bradbury & Yolanda K. Kodrzycki & Robert Tannenwald, 1997. "Effects of state and local public policies on economic development: an overview," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 1-12. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:rre:publsh:v:36:y:2006:i:1:p:15-43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher Yencha)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.