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Chasing a Dream: The Use of Tax Abatements to Spur Urban Economic Development

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  • Michael J. Wolkoff

    (Public Policy Analysis Program, University of Rochester, Rochester, New York)

Abstract

In this paper I develop a systematic framework for assessing the effectiveness of granting tax abatements to encourage urban economic development. This approach focuses upon the abatement's effect upon the firm's decision to invest and the impact of the investment upon the community. Current policy fails to take these considerations into account adequately. I use this framework to evaluate the potential revenue gain to the City of Detroit of offering variable abatement awards, and suggest a set of proposals to improve program performance.

Suggested Citation

  • Michael J. Wolkoff, 1985. "Chasing a Dream: The Use of Tax Abatements to Spur Urban Economic Development," Urban Studies, Urban Studies Journal Limited, vol. 22(4), pages 305-315, August.
    • Handle: RePEc:sae:urbstu:v:22:y:1985:i:4:p:305-315
    DOI: 10.1080/00420988520080541
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    References listed on IDEAS

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    1. William F. Fox, 1981. "Fiscal Differentials and Industrial Location: Some Empirical Evidence," Urban Studies, Urban Studies Journal Limited, vol. 18(1), pages 105-111, February.
    2. Charney, Alberta H., 1983. "Intraurban manufacturing location decisions and local tax differentials," Journal of Urban Economics, Elsevier, vol. 14(2), pages 184-205, September.
    3. Michael J. Wasylenko, 1980. "Evidence of Fiscal Differentials and Intrametropolitan Firm Relocation," Land Economics, University of Wisconsin Press, vol. 56(3), pages 339-349.
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