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Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts


  • Joshua C. Hall

    (Department of Economics and Management, Beloit College, Beloit, WI, USA,

  • Justin M. Ross

    (School of Public and Environmental Affairs, Indiana University, Bloomington, IN, USA)


Previous research has shown that Tiebout-style fiscal competition among local governments reduces the likelihood of adopting income taxes. This literature has not yet considered the impact of yardstick competition on tax instrument choice. This article uses spatial econometrics to test for yardstick competition in the decision to adopt an income tax. The results, based on Ohio school district data, indicate that school districts are more likely to adopt an income tax if their neighbors have already done so. While a negative correlation of Tiebout competition on district income tax adoption persists, controlling for spatial dependence reduces the statistical significance of the effect.

Suggested Citation

  • Joshua C. Hall & Justin M. Ross, 2010. "Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts," Public Finance Review, , vol. 38(6), pages 710-737, November.
  • Handle: RePEc:sae:pubfin:v:38:y:2010:i:6:p:710-737

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    Cited by:

    1. Joshua C. Hall & Donald J. Lacombe & Timothy M. Shaughnessy, 2015. "Economic Freedom and Economic Growth Across U.S. States: A Spatial Panel Data Analysis," Working Papers 15-33, Department of Economics, West Virginia University.
    2. Sriparna Ghosh & Joshua C. Hall, 2015. "The Political Economy of Soda Taxation," Working Papers 15-50, Department of Economics, West Virginia University.
    3. Hall, Joshua C., 2015. "Local Government Border Congruence and the Fiscal Commons: Evidence from Ohio School Districts," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).
    4. repec:ebl:ecbull:eb-16-00858 is not listed on IDEAS
    5. repec:spr:anresc:v:60:y:2018:i:1:d:10.1007_s00168-015-0705-x is not listed on IDEAS
    6. James LeSage & Matthew Dominguez, 2012. "The importance of modeling spatial spillovers in public choice analysis," Public Choice, Springer, vol. 150(3), pages 525-545, March.
    7. Denvil Duncan & Ed Gerrish, 2014. "Personal income tax mimicry: evidence from international panel data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 119-152, February.
    8. Joshua Hall & Antonis Koumpias, 2015. "The Volatility of School District Income Tax Revenues: Is Tax Base Diversification a Good Idea?," Working Papers 15-14, Department of Economics, West Virginia University.
    9. Joshua C. Hall & Christopher Shultz & E. Frank Stephenson, 2015. "The Political Economy of Local Fracking Bans," Working Papers 15-37, Department of Economics, West Virginia University.
    10. Joshua C. Hall & Serkan Karadas & Minh Tam T. Schlosky, 2016. "Spatial Spillover Effects of Debt Relief from the Heavily Indebted Poor Countries (HIPC) Initiative," Working Papers 16-23, Department of Economics, West Virginia University.
    11. George Crowley, 2012. "Spatial dependence in constitutional constraints: the case of US states," Constitutional Political Economy, Springer, vol. 23(2), pages 134-165, June.
    12. Brasington, David & Flores-Lagunes, Alfonso & Guci, Ledia, 2016. "A spatial model of school district open enrollment choice," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 1-18.
    13. Joshua C. Hall, 2013. "Does School District and Municipality Border Congruence Matter? A Spatial Hedonic Approach," Working Papers 13-02, Department of Economics, West Virginia University.
    14. Dean Stansel, 2012. "Competition, knowledge, and local government," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 25(3), pages 243-253, September.
    15. Michael Conlin & Paul N. Thompson, 2014. "Michigan and Ohio K–12 Educational Financing Systems: Equality and Efficiency," Education Finance and Policy, MIT Press, vol. 9(4), pages 417-445, October.
    16. Robert Lawson & Todd Nesbit, 2013. "Alchian and Allen Revisited: Law Enforcement and the Price of Weed," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(4), pages 363-370, December.


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