IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v87y2005i4p627-634.html
   My bibliography  Save this article

Using Regional Economic Indexes to Forecast Tax Bases: Evidence from New York

Author

Listed:
  • Robert Rich

    (Federal Reserve Bank of New York)

  • Jason Bram

    (Federal Reserve Bank of New York)

  • Andrew Haughwout

    (Federal Reserve Bank of New York)

  • James Orr

    (Federal Reserve Bank of New York)

  • Rae Rosen

    (Federal Reserve Bank of New York)

  • Rebecca Sela

    (Leonard K. Stern School of Business, New York University)

Abstract

This paper evaluates the use of measures of regional economic activity to forecast tax revenues for New York State and New York City at 3-, 6-, and 12-month horizons. We construct sales- and withholding-tax base series and then apply the methodology of Stock and Watson (1989, 1991) to estimate regional indexes of coincident economic indicators. Employing an out-of-sample forecasting framework, we find that the use of the coincident indexes leads to statistically and economically significant improvements in tax base forecasts compared to those generated from univariate autoregressions. In addition, the coincident indexes produce forecasts that are generally more accurate than forecasts that rely on the use of the coincident indicators separately. Though our analysis focuses on forecasting movements in tax revenue at the state or local level, it is also intended to draw attention to the value the indexes may provide in other applications. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Robert Rich & Jason Bram & Andrew Haughwout & James Orr & Rae Rosen & Rebecca Sela, 2005. "Using Regional Economic Indexes to Forecast Tax Bases: Evidence from New York," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 627-634, November.
  • Handle: RePEc:tpr:restat:v:87:y:2005:i:4:p:627-634
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/003465305775098215
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Todd E. Clark & Michael W. Mccracken, 2014. "Tests Of Equal Forecast Accuracy For Overlapping Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(3), pages 415-430, April.
    2. Jason Bram & James A. Orr & Robert W. Rich & Rae D. Rosen & Joseph Song, 2009. "Is the worst over? Economic indexes and the course of the recession in New York and New Jersey," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 15(Sep).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:87:y:2005:i:4:p:627-634. 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: (Ann Olson). General contact details of provider: https://www.mitpressjournals.org/ .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.