RESIDENTIAL MOBILITY AND LIFE CYCLE: IDENTIFYING THE ROLE OF LOCAL TAXES

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This study examines the influence of local taxes on household migration behavior between French municipalities (“communes”). We group households into five tenure status categories and four categories of household head age. Our findings support Tiebout "voting with feet" theory, especially among young flat renters in the private sector and flat owners. A surprising result is related to the introduction of the municipality size in the regression which dramatically affects the coefficient measuring the effect of local tax rates on migration probability. This suggests that a large part of the “Tiebout effect” usually found in the literature is an artefact caused by the spurious correlation between municipality size and local tax rates.

Keywords: Residential mobility; local taxes; local public expenditures; heterogeneity; local amenities; life cycle. (search for similar items in EconPapers)
JEL-codes: H71 H72 R23 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-mig, nep-pbe, nep-pub and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2023-43

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