If You Build It, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund

Austin Quackenbush, Deepak Premkumar, Georgeanne Artz and Peter Orazem

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: The philosophy of fiscal federalism presumes that local communities will under- or over-provide public amenities in the presence of externalities. We test this hypothesis using data from Vision Iowa, a state program which provided partial funding to communities to build tourist attractions. We find a 1% increase in investment increased county taxable retail sales 0.9%. The State's return, from program-induced sales tax revenue, averaged 9.2% annually. Local communities' returns averaged 0.9% and we find a significant increase in surrounding areas' sales. This suggests that without state subsidies, communities would undersupply public amenities aimed at attracting visitors.

Keywords: fiscal federalism; local public goods; subsidy; externality; spillover; amenity; retail sales (search for similar items in EconPapers)
JEL-codes: H2 H4 H7 (search for similar items in EconPapers)
Date: 2011-10-08
New Economics Papers: this item is included in nep-tur and nep-ure
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Citations: View citations in EconPapers (1)

Published in Review of Regional Studies, Winter 2013, vol. 43 no. 2,3, pp. 155-173

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http://www2.econ.iastate.edu/papers/p14375-2011-10-09.pdf (application/pdf)

Related works:
Journal Article: If You Build it, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund (2013)
Working Paper: If You Build It, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund (2013)
Working Paper: If you build it, will they come?: fiscal federalism, local provision of public tourist amenities, and the Vision Iowa fund (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:34375

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