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The Impact of Wal-Mart on Local Fiscal Health: Evidence from a Panel of Ohio Counties

Listed author(s):
  • Michael J. Hicks

    (Air Force Institute of Technology)

This research analyzes selected fiscal impacts of Wal-Mart in Ohio from 1985 through 2003. Using a panel of counties, and accounting for spatial autocorrelation in an instrumental variable model I estimate impact of Wal-Mart and Super-Centers on selected revenues and transfer payments. On revenues I find that the presence of a Wal-Mart increases local commercial property tax assessments, resulting in collection increases of between $350,000 to roughly $1.3 million. Wal-Mart also is associated with higher levels of local labor force participation. On expenditures I also find that the presence of a Wal-Mart dramatically increases the per capita EITC claims in a county (between 18 and 43 percent), while the dollar value of these claims experiences mixed impacts between Wal-Mart and a Supercenter. Similarly, the impact of Wal-Mart on Foodstamps expenditures is mixed, but small in any case. There are no in-county impacts of Wal-Mart on expenditures on Temporary Assistance to Needy Families and its predecessor Aid to Families with Dependent Children. However, Medicaid expenditures experience growth which may amount to roughly 16 additional cases per county attributable to a single Wal- Mart. The per worker costs of Medicaid estimated in this study is consistent with reported levels in a number of states, and study estimates by Dube and Jacobs [2004], Carlson [2005] and Hicks [2005a]. The magnitude and statistical certainty of these findings, accompanied by a review of previous research suggests that local fiscal intervention, either through incentives or the much touted “Wal-Mart Tax” is unwarranted.

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Paper provided by EconWPA in its series Public Economics with number 0511016.

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Date of creation: 21 Nov 2005
Handle: RePEc:wpa:wuwppe:0511016
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  1. 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.
  2. Stone, Kenneth E., 1995. "Competing With the Retail Giants," Staff General Research Papers Archive 5307, Iowa State University, Department of Economics.
  3. Barnes, Nora Ganim & Connell, Allison & Hermenegildo, Lisa & Mattson, Lucinda, 1996. "Regional differences in the economic impact of Wal-Mart," Business Horizons, Elsevier, vol. 39(4), pages 21-25.
  4. 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.
  5. Robert I. Lerman & Kelly S. Mikelson, 2004. "Examining the Relationship between the EITC and Food Stamp Program Participation Among Households with Children," Econometric Society 2004 North American Summer Meetings 190, Econometric Society.
  6. 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.
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