IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/30937.html
   My bibliography  Save this paper

The effect of Walmart on the tax base: evidence from New Jersey

Author

Listed:
  • Vandegrift, Donald
  • Loyer, John
  • Kababik, David

Abstract

This paper measures the impact of 30 Walmart openings on the municipal tax base using panel data for New Jersey municipalities from 1998-2007. We consider the impact of the new Walmart on the home municipality as well as the nearest adjacent municipality in the year the outlet opens as well as the two subsequent years. Because Walmart may exert differing effects on residential and non-residential values, we undertake separate analyses of the impact of Walmart on the residential and non-residential tax bases. We find that a new Walmart has a significant positive impact on the growth in the tax base in host municipalities the second year that it is open, but not in years one and three. In addition, the impact of the Walmart on the growth in the tax base depends on the size of the municipality. In the average-sized municipality, the real equalized tax base growth rate rises only about 0.35 percentage points in the second year. This effect is primarily the result of Walmart’s impact on residential values in the host municipality. By contrast, a new Walmart causes a modest but consistently negative effect on growth of the tax base in the adjacent municipality across all three years that we are able to measure. In the average sized municipality for our sample, the real equalized tax base growth rate falls rate falls 0.065, 0.081, and 0.096 percentage points, respectively. This effect occurs primarily through the Walmart’s impact on growth of non-residential values. The cumulative effect of this reduction in growth in the adjacent municipality is roughly two thirds of the increase in growth experienced by the home municipality.

Suggested Citation

  • Vandegrift, Donald & Loyer, John & Kababik, David, 2011. "The effect of Walmart on the tax base: evidence from New Jersey," MPRA Paper 30937, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:30937
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/30937/1/MPRA_paper_30937.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Neumark, David & Zhang, Junfu & Ciccarella, Stephen, 2008. "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, Elsevier, vol. 63(2), pages 405-430, March.
    2. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
    3. Michael J Hicks, 2008. "Estimating Wal-Mart's Impacts in Maryland: A Test of Identification Strategies and Endogeneity Tests," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 34(1), pages 56-73, Winter.
    4. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
    5. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    6. Georgeanne M. Artz & Kenneth E. Stone, 2006. "Analyzing the Impact of Wal-Mart Supercenters on Local Food Store Sales," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1296-1303.
    7. Hicks, Michael J., 2009. "Wal-Mart and Small Business: Boon or Bane?," The Review of Regional Studies, Southern Regional Science Association, vol. 39(1), pages 73-83.
    8. Donald Vandegrift & Michael Lahr, 2011. "Open space, house prices, and the tax base," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(1), pages 83-100, February.
    9. Michael J. Hicks & Kristy Wilburn, 2005. "The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," Urban/Regional 0511011, EconWPA.
    10. Michael J. Hicks, 2005. "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?," Public Economics 0511015, University Library of Munich, Germany.
    11. Stephan J. Goetz & Hema Swaminathan, 2006. "Wal-Mart and County-Wide Poverty," Social Science Quarterly, Southwestern Social Science Association, vol. 87(2), pages 211-226.
    12. Srikanth Paruchuri & Joel A. C. Baum & David Potere, 2009. "The Wal-Mart Effect: Wave of Destruction or Creative Destruction?," Economic Geography, Clark University, vol. 85(2), pages 209-236, April.
    13. Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Pope, Devin G. & Pope, Jaren C., 2015. "When Walmart comes to town: Always low housing prices? Always?," Journal of Urban Economics, Elsevier, vol. 87(C), pages 1-13.

    More about this item

    Keywords

    Tax Base; Walmart; Retailing; Big Box;

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:30937. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 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.