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Portfolio Analysis and Vertical Equity: a New York Application

Author

Listed:
  • Rajiv Mallick

    (Union College)

  • Oskar Ragnar Harmon

    (University of Connecticut)

Abstract

This study makes two contributions to the literature on portfolio models and the analysis of state finances. First, the study applies recent developments in time series analysis—unit root tests for stationarity—to develop more efficient estimates of tax growth and tax instability than heretofore. Second, the study extends the conventional tax portfolio model, which balances the portfolio mix to maximize stability for selected growth targets, to encompass a third tax policy goal: vertical equity. The model is applied to New York State to demonstrate its practical usefulness as a fiscal tool for state policy analysts.

Suggested Citation

  • Rajiv Mallick & Oskar Ragnar Harmon, 1994. "Portfolio Analysis and Vertical Equity: a New York Application," Public Finance Review, , vol. 22(4), pages 418-438, October.
    • Handle: RePEc:sae:pubfin:v:22:y:1994:i:4:p:418-438
    DOI: 10.1177/109114219402200402
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    References listed on IDEAS

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    1. Dye, Richard F. & McGuire, Therese J., 1991. "Growth and Variability of State Individual Income and General Sales Taxes," National Tax Journal, National Tax Association, vol. 44(1), pages 55-66, March.
    2. Braun, Bradley M., 1988. "Measuring Tax Revenue Stability with Implications for Stabilization Policy: A Note," National Tax Journal, National Tax Association, vol. 41(4), pages 595-98, December.
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    4. Suits, Daniel B, 1977. "Measurement of Tax Progressivity," American Economic Review, American Economic Association, vol. 67(4), pages 747-752, September.
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    6. Braun, Bradley M., 1988. "Measuring Tax Revenue Stability With Implications for Stabilization Policy: A Note," National Tax Journal, National Tax Association;National Tax Journal, vol. 41(4), pages 595-598, December.
    7. Menzie David Chinn, 1991. "Beware of econometricians bearing estimates: Policy analysis in a “unit root” world," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 10(4), pages 546-567.
    8. Dye, Richard F. & McGuire, Therese J., 1991. "Growth and Variability of State Individual Income and General Sales Taxes," National Tax Journal, National Tax Association;National Tax Journal, vol. 44(1), pages 55-66, March.
    9. Harris, R I D, 1992. "Small Sample Testing for Unit Roots," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 615-625, November.
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    Cited by:

    1. William Seyfried & Louis Pantuosco, 2003. "Estimating the sensitivity of state tax revenue to cyclical and wealth effects," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 27(1), pages 114-124, March.
    2. Chimezie Ozurumba & Younhee Kim, 2017. "New development: Evaluating state revenue portfolio stability—a case of commercial casino taxes," Public Money & Management, Taylor & Francis Journals, vol. 37(7), pages 521-526, November.

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