DO LOCAL GOVERNMENTS ENGAGE IN STRATEGIC PROPERTY- TAX COMPETITION

Luz Amparo Saavedra

No 2378, Borradores de Economia from Banco de la Republica

Abstract: This paper uses spatial econometric methods to investigate property-tax competition among local governments. The theoretical model is drawn from the literature on tax competition, in which local jurisdictions choose property-tax rates taking into account the migration of mobile capital in response to tax di®erentials. Using a spatial lag" econometric model, the paper estimates the reaction function of the representative community, which relates the community's property-tax rate to its own characteristics and to the tax rates in competing communities. A nonzero reaction-function slope indicates the presence of strategic interaction in the choice of tax rates. The estimation uses cross-section data on property taxes and other socio-economic variables for cities in the Boston metropolitan area. The results, which are presented for two periods before and after imposition of Proposition 21 2 (a tax limitation measure), indicate the presence of strategic interaction.

Pages: 36
Date: 2000-01-30
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.banrep.gov.co/docum/ftp/borra139.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000094:002378

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica
Bibliographic data for series maintained by Clorith Angelica Bahos Olivera ().