 Property tax capitalization, a case study of Dallas CountySeth Giertz, Rasoul Ramezani and Kurt J. Beron Regional Science and Urban Economics, 2021, vol. 89, issue C Abstract: We estimate the degree to which local property taxes are capitalized into house prices using administrative data from the Dallas Central Appraisal District (DCAD) from 2014 to 2016. Capitalization rates are measured using a hedonic price regression model. To control for unobservable neighborhood characteristics, we employ a border discontinuity research design, restricting our sample to homes within half-mile blocks of jurisdictional boundaries. With respect to school district taxes, we estimate that more than 70 percent of the increase in the present value of property tax liabilities resulting from a tax increase is capitalized into current house prices. The null hypothesis of full capitalization cannot be rejected. For city taxes, capitalization rates are even larger. We also estimate the willingness to pay for public schools, finding that a one standard deviation increase in test scores results in a roughly four-percent increase in house prices. Keywords: House prices; Property tax; Tax capitalization; Public schools; Border discontinuity (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:89:y:2021:i:c:s0166046221000405 DOI: 10.1016/j.regsciurbeco.2021.103680 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 |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.