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Residential Mobility And Life Cycle: Identifying The Role Of Local Taxes

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  • Asmae AQZZOUZ
  • Nathalie PICARD

Abstract

This study examines the influence of local taxes on household migration behavior between French municipalities (“communes”). We group households into five tenure status categories and four categories of household head age. Our findings support Tiebout "voting with feet" theory, especially among young flat renters in the private sector and flat owners. A surprising result is related to the introduction of the municipality size in the regression which dramatically affects the coefficient measuring the effect of local tax rates on migration probability. This suggests that a large part of the “Tiebout effect” usually found in the literature is an artefact caused by the spurious correlation between municipality size and local tax rates.

Suggested Citation

  • Asmae AQZZOUZ & Nathalie PICARD, 2023. "Residential Mobility And Life Cycle: Identifying The Role Of Local Taxes," Working Papers of BETA 2023-43, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2023-43
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    More about this item

    Keywords

    Residential mobility; local taxes; local public expenditures; heterogeneity; local amenities; life cycle.;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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