Does Tax Increment Financing Pass the “But-for†Test in Missouri?

Ahmed Rachid El-Khattabi and T. William Lester

Economic Development Quarterly, 2019, vol. 33, issue 3, 187-202

Abstract: The use of tax increment financing (TIF) remains a popular, yet highly controversial, tool among policy makers in their efforts to promote economic development. This study conducts a comprehensive assessment of the effectiveness of Missouri’s TIF program, specifically in Kansas City and St. Louis, in creating economic opportunities. We build a time-series data set starting 1990 through 2012 of detailed employment levels, establishment counts, and sales at the census block-group level to run a set of difference-in-differences with matching estimates for the impact of TIF at the local level. Although we analyze the impact of TIF on a wide set of indicators and across various industry sectors, we find no conclusive evidence that the TIF program in either city has a causal impact on key economic development indicators.

Keywords: tax increment financing; economic development incentives; economic impact (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:33:y:2019:i:3:p:187-202

DOI: 10.1177/0891242419859097

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