Does Coordination Among Assessing Units Generate Returns to Scale? Evidence from New York State

Yilin Hou, Yusun Kim and John Yinger

No 7931, CESifo Working Paper Series from CESifo

Abstract: This paper explores (dis-)economies of scale in property value assessment via cooperative agreements among small tax assessing jurisdictions without consolidation. New York State incentivizes small neighboring towns to unify their assessment function while maintaining respective tax authority; we test whether such coordination reduces assessment expenditure. We apply the cost function approach, include instruments (border intersection and prior cooperation in service provision) to address potential bias in selecting coordination partners, and use 2003- 2014 administrative data for analyses. Results show that coordination increases adjustment costs for small jurisdictions but reduces unit costs among relatively large ones. This study contributes to the returns-to-scale literature in service provision, especially to property tax administration.

Keywords: property tax; value assessment; local financial administration; economies of scale; cost function (search for similar items in EconPapers)
JEL-codes: H20 H70 R51 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7931

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