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Property Tax and Urban Sprawl. Theory and Implications for U.S. Cities

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  • Zenou, Yves
  • Song, Yan
Abstract
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.

Suggested Citation

  • Zenou, Yves & Song, Yan, 2005. "Property Tax and Urban Sprawl. Theory and Implications for U.S. Cities," CEPR Discussion Papers 5345, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5345
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    References listed on IDEAS

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    1. Wallace E. Oates & Robert M. Schwab & Wallace E. Oates & Robert M. Schwab, 2004. "The Impact of Urban Land Taxation: The Pittsburgh Experience," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 16, pages 273-293, Edward Elgar Publishing.
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    More about this item

    Keywords

    Urban sprawl; Urban economics; Property tax; Instrumental variables; Fully-closed city;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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