A New Approach for Identifying the Parameters of a Tax Capitalization Model

Palmon, Oded; Smith, Barton A.

doi:10.1006/juec.1997.2072

Cited by 30 publications

(15 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Other authors have criticized the empirical generalization of the principle, according to which higher taxation generates reductive effects on property values [43], demonstrating the need to specify the assumptions of the implemented models [44,45] and to differentiate the tax effects in various territorial contexts [46,47]. In fact, from a theoretical point of view, higher fiscal taxation should determine more public investments in local territory [48], which should therefore result in higher appreciation of local properties by potential buyers.…”

Section: Introductionmentioning

confidence: 99%

An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)

et al. 2017

View full text Add to dashboard Cite

Abstract:In this research, the socio-economic determinants of housing market values have been examined, highlighting their respective contributions to the formation of the property prices and, in particular, verifying the property tax liability. The property tax is a factor that could determine, through modest fluctuations, the revival of the property demand, generating positive effects also on the construction sector, which has been currently affected by the negative real estate contingency. The functional correlations of housing prices with the main socio-economic variables considered (i.e., housing rents, household incomes, household consumptions, property taxes, population and mean population age) have been explained through an econometric analysis implemented with an innovative methodology that uses multi-objective genetic algorithms. The analysis is contextualized to the Apulia region in the South of Italy, and the population of the sample studied consists of 258 individuals, corresponding to the municipalities of the region. In particular, the data collected for each variable considered refer to two different moments, that is, the year 2011 and the year 2015, in order to take into account the fiscal tightening that has occurred in Italy in this period of time. The elaborations carried out have allowed us to enucleate interesting functional relationships between property prices and the explanatory variables considered.

show abstract

Section: Introductionmentioning

confidence: 99%

An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)

et al. 2017

View full text Add to dashboard Cite

show abstract

“…The difference between the two rates is not statistically significant. These figures fall down a plausible confidence interval of the actual real interest rates on mortgage loans observed for that period; in terms of Palmon and Smith's (1998) methodology, these results indicate a full capitalization of taxes at a real discount rate of 3.5%. They suggest the existence of an almost complete 'Laffer effect'.…”

Section: Resultsmentioning

confidence: 84%

Measuring the social value of local public goods: an empirical analysis within Paris metropolitan area

Michelangeli¹,

Gravel

Trannoy

2006

Applied Economics

View full text Add to dashboard Cite

A non-linear hedonic model is used to estimate the implicit marginal prices of 17 local public goods in a Paris suburban area on an original data set of some 8200 housing units. The results reveal a robust effect of local public school quality (measured both by the fraction of junior high school students that are at least two years behind grade level and the student/teacher ratio) on house prices. It is observed that housing owners' marginal willingness to pay for reducing commuting time is roughly similar for public transportation than for car transportation. Another noticeable result is the complete capitalization of local taxes at a discount rate of 3.5%. An illustration of the potential usefulness of the results for Cost-Benefit analysis is also provided.

show abstract

“…Out of the traditional view has come a significant body of literature that focuses on the impact of taxes on property values (Li and James Brown 1980;Oates 1969;Palmon and Smith 1998;Tiebout 1956;Yinger et al 1988). While much of this research has centred around the effect of property taxes, Man and Bell (1996) have documented the effect of sales on the consumers' budgetary decisions.…”

Section: A Theory Of Surtaxesmentioning

confidence: 99%

“…To counteract this decline in surplus, the rational actor seeks ways to displace the cost of the tax. Prior research, for example, has shown that local property and sales taxes can be displaced by changes in rental fees within and between jurisdictions (Li and James Brown 1980;Man and Bell 1996;Oates 1969;Palmon and Smith 1998). From an economic perspective, there is concern that the cost of a surtax may be displaced towards those who the tax revenue intends to help.…”

Section: Introductionmentioning

confidence: 99%

Helpful local surtaxes? Florida and disadvantaged families

Miller

Eger

McDonald

2016

Local Government Studies

View full text Add to dashboard Cite

Well-intended tax policy often produces unintended consequences. In this article, we look at one such tax policy, specialised surtaxes in the State of Florida. Surtaxes are frequently adopted to provide financial assistance to poverty-based local programmes and services. Despite the intended benefits, we show that the contributors of the tax have been able to capitalise the cost into the residential property market, ultimately placing the burden of the surtax upon the population its revenue intends to help.

show abstract

A New Approach for Identifying the Parameters of a Tax Capitalization Model

Cited by 30 publications

References 32 publications

An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)

An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)

Measuring the social value of local public goods: an empirical analysis within Paris metropolitan area

Helpful local surtaxes? Florida and disadvantaged families

Contact Info

Product

Resources

About