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Central command, local hazard and the race to the top

  • Edoardo Di Porto

    ()

    (LABOR, Centre for Employment Studies)

  • Federico Revelli

    ()

    (University of Torino)

This paper explores for the first time the consequences of centrally imposed local tax limitations on the modelling and estimation of spatial auto-correlation in local fiscal policies, and compares three spatial interaction estimators: a) the conventional maximum likelihood estimator that ignores censoring; b) a spatial Tobit estimator; c) a discrete hazard estimator. Implementation of the above empirical approaches on the case of local vehicle taxation in Italy provides a reasonably coherent picture in terms of the direction and size of the spatial interaction process, and offers a plausible spatial interpretation of the race to the top in provincial vehicle taxes.

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File URL: http://ieb.ub.edu/aplicacio/fitxers/2009/10/Doc2009-26.pdf
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Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2009/26.

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Length: 36 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:ieb:wpaper:2009/10/doc2009-26
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  1. Jon Fiva & Jørn Rattsø, 2007. "Local choice of property taxation: evidence from Norway," Public Choice, Springer, vol. 132(3), pages 457-470, September.
  2. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 203-30, June.
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  7. Peltzman, Sam, 1992. "Voters as Fiscal Conservatives," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 327-61, May.
  8. Fredriksson, Per G. & Millimet, D.L.Daniel L., 2004. "Comparative politics and environmental taxation," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 705-722, July.
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  10. Stefan Suter & Felix Walter, 2001. "Environmental Pricing-Theory and Practice: The Swiss Policy of Heavy Vehicle Taxation," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(3), pages 381-397, September.
  11. Downes, Thomas A. & Dye, Richard F. & McGuire, Therese J., 1998. "Do Limits Matter? Evidence on the Effects of Tax Limitations on Student Performance," Journal of Urban Economics, Elsevier, vol. 43(3), pages 401-417, May.
  12. Antonio P�ez & Darren M Scott & Erik Volz, 2008. "A discrete-choice approach to modeling social influence on individual decision making," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 35(6), pages 1055-1069, November.
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  19. repec:att:wimass:9127 is not listed on IDEAS
  20. Maskin, Eric & Qian, Yingyi & Xu, Chenggang, 2000. "Incentives, Information, and Organizational Form," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 359-78, April.
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  23. Jacques Cremer & Thomas R. Palfrey, 2000. "Federal Mandates by Popular Demand," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 905-927, October.
  24. Sole Olle, Albert, 2003. "Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology," European Journal of Political Economy, Elsevier, vol. 19(4), pages 685-713, November.
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  26. Bard Harstad, 2006. "Flexible Integration," Discussion Papers 1428, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  27. Nechyba, Thomas J, 1997. "Local Property and State Income Taxes: The Role of Interjurisdictional Competition and Collusion," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 351-84, April.
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