DP5345 Property Tax and Urban Sprawl. Theory and Implications for U.S. Cities
|Author(s):||Yan Song, Yves Zenou|
|Publication Date:||November 2005|
|Keyword(s):||fully-closed city, instrumental variables, property tax, urban economics, urban sprawl|
|JEL(s):||H3, H71, R14|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=5345|
This article attempts a formal analysis of the connection between property tax and urban sprawl in U.S. cities. We develop a theoretical model that includes households (who are also landlords) and land developers in a regional land market. We then test the model empirically based on a national sample of urbanized areas. The results we obtained from both theoretical and empirical analyses indicate that increasing property tax rates reduces the size of urbanized areas.