 The impact of positive property tax differentials on the timing of developmentRegional Science and Urban Economics, 2009, vol. 39, issue 6, 739-748 Abstract: To date, few empirical studies have focused on the location decision by residential developers in response to changes in the property tax. Based on a dynamic time-to-development model by Turnbull, this paper finds, using 17Â years of parcel level data from Saint Louis County, Missouri, that higher than average tax rates increase the time-to-development for vacant parcels by between 4 and 11%, all else equal. Additionally this paper finds that the tax differential effect is cumulative, resulting in about a 20% increase in the time-to-development for the parcel facing the average number of years with a higher than average rate. These results support the analytical results by both Turnbull [Turnbull, G.K., 1988. The effects of local taxes and public services on residential development patterns. Journal of Regional Science, 28 (4), 541-562.] and McMillen [McMillen, D.P., 1990. The timing and duration of development tax rate increases. Journal of Urban Economics, 28, 1-18.] that the property tax can distort residential capital markets leading to inefficient urban growth, or sprawl. Keywords: Property; tax; Property; tax; incidence; Duration; analysis; Urban; growth; Sprawl (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:39:y:2009:i:6:p:739-748 Access Statistics for this article Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou More articles in Regional Science and Urban Economics from Elsevier |
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