IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Consequences of Debt Capitalization: Property Ownership and Debt versus Tax Choice

Listed author(s):
  • David Stadelmann


    (University of Fribourg, Department of Economics, Bd. de Pérolles 90, 1700 Fribourg, Switzerland; CREMA—Center for Research in Economics, Management and the Arts, Switzerland
    University of Fribourg, Department of Economics, Bd. de Pérolles 90, 1700 Fribourg, Switzerland; CREMA—Center for Research in Economics, Management and the Arts, Switzerland)

Public debts capitalize into property prices. Thus, they are a burden to the present generation who owns the devalued property. This largely neglected fact has important consequences for the tax versus debt choice. Property owners suffer more from the debt burden and, thus, have a stronger preference for tax financing of government spending than tenants. As a consequence of the resulting democratic struggle between property owners and tenants, higher property ownership rates in a jurisdiction lead to less debt financing. We provide empirical support for this hypothesis by analyzing a cross section of the 171 communities in the Swiss Canton of Zurich in the year 2000.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 78 (2012)
Issue (Month): 3 (January)
Pages: 976-998

in new window

Handle: RePEc:sej:ancoec:v:78:3:y:2012:p:976-998
Contact details of provider: Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:78:3:y:2012:p:976-998. 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: (Laura Razzolini)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.