Testing the Tiebout Hypothesis in the U.S

Myeong-Soo Kim
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Myeong-Soo Kim: Korea Research Institute for Human Settlements

Korean Economic Review, 1998, vol. 14, 231-243

Abstract: In this study, the Tiebout hypothesis is extended in the context of the capi-talization of property taxes and local public services: The Tiebout hypothesis is teste4 using a fixed effect panel data model. To reduce endogeneity between capitalization rates and properly taxes, IV (Instrumental Variable) estimate is used The empirical result from N estimates shows that the coefficient for property tax is close to zero. This fact indicates that property taxes are capi-talized almost 0% into house walue and the Tiebout hypothesis is satisfied here.

Keywords: Tiebout Hypothesis; A Fixed Effect Panel Data Model; Capitallwition of Property Taxes; Instrumental Variable Estimate (search for similar items in EconPapers)
JEL-codes: R0 R5 (search for similar items in EconPapers)
Date: 1998
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