Portal de Periódicos da CAPES

The effect of property taxes on vacation home growth rates: Evidence from Michigan

2013; Elsevier BV; Volume: 43; Issue: 5 Linguagem: Inglês

10.1016/j.regsciurbeco.2013.06.001

1879-2308

Erik B. Johnson, Randall Walsh,

Urban, Neighborhood, and Segregation Studies

Abstract The Tiebout model assumes that individuals sort to the jurisdiction which best matches their fiscal preferences. However, there is a paucity of reliable estimates for the impact of tax changes on household mobility. We utilize a state mandated school finance reform and temporal differences in vacation home densities to provide a unique test of this fundamental Tiebout assumption. The results show that changes in property taxes explain a significant amount of the variation in vacation home growth; a 3–4 mil decrease in property tax rates is associated with an increase of approximately one vacation home per square kilometer.