New Public Transportation Infrastructure and Tax Delinquency in Shrinking Cities: The Case of Detroit

Fernanda Alfaro, Dusan Paredes and Mark Skidmore

International Regional Science Review, 2023, vol. 46, issue 4, 410-427

Abstract: Fiscal stress is a common condition in shrinking cities such as Detroit. Among the contributing factors, property tax delinquency is a significant consideration due to the unwillingness or inability to pay property taxes. The literature shows that improvement in the quality of public goods and services can increase tax compliance and strengthen the social contract between taxpayers and the local government. Nonetheless, this relationship is unclear in the context of low-income shrinking cities. This article estimates the effects of new publicly provided transportation infrastructure on property tax compliance in Detroit, Michigan. Specifically, we use the announcement of the Qline in Detroit. We compute the effects of the Qline announcement on tax delinquency behavior using a Spatial Difference-in-Difference approach. The results indicate that the announcement of the Qline had an economically and statistically significant impact on tax delinquency for properties within one mile of the nearest Qline station.

Keywords: Taxes; public transport; tax delinquency (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:inrsre:v:46:y:2023:i:4:p:410-427

DOI: 10.1177/01600176221145875

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