Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts
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.
Volume (Year): 38 (2010)
Issue (Month): 6 (November)
|Contact details of provider:|
When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:38:y:2010:i:6:p:710-737. 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: (SAGE Publications)
If references are entirely missing, you can add them using this form.