Search Results
Working Paper
Is the Rent Too High? Aggregate Implications of Local Land-Use Regulation
Highly productive U.S. cities are characterized by high housing prices, low housing stock growth, and restrictive land-use regulations (e.g., San Francisco). While new residents would benefit from housing stock growth in cities with highly productive firms, existing residents justify strict local land-use regulations on the grounds of congestion and other costs of further development. This paper assesses the welfare implications of these local regulations for income, congestion, and urban sprawl within a general-equilibrium model with endogenous regulation. In the model, households choose ...
Working Paper
Capitalization as a Two-Part Tariff: The Role of Zoning
This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a ticket" price paid regardless of the amount of housing service consumed and a slope" price paid per unit of services. We first show theoretically how tickets arise as an extensi ve margin price when there are binding constraints on the number of households admitted to a neighborhood. We use a large national dataset of housing transactions, property characte ristics, and neighbor- hood attributes to measure the extent to which local amenities are capitalized in ticket ...
Working Paper
Unauthorized Immigration and Fiscal Competition
Reflecting upon recent enforcement policy activism of US states and countries within the EU towards unauthorized workers, we examine the overlap of centralized (federal) and decentralized (state or regional) enforcement of immigration policies in a spatial context. Among other results, we find that if interstate mobility is costless, internal enforcement is overprovided, and border enforcement and local goods are underprovided when regions take more responsibility in deciding policies. This leads to higher levels of unauthorized immigration under decentralization. Interregional migration ...
Working Paper
Why Haven’t Regional Wages Converged?
Regional wage convergence has long been predicted across the United States as barriers to factor mobility have fallen, yet there is little evidence (apart from a brief period in the 1970s and 1980s) that convergence has actually occurred. Why not? I reexamine this issue by developing a model in which fiscal policy differences across states endogenously impact labor supply across jurisdictions. I find that states whose safety nets are relatively generous will tend to drive out workers, raising wages for those who remain while also prompting net outmigration to less generous states. This ...
Working Paper
Interjurisdictional Competition and Location Decisions of Firms
We examine the welfare properties of alternative regimes of interjurisdictional competition for heterogenous mobile firms. Firms differ not only in terms of the degree of mobility across jurisdictions but also in terms of productivity. Alternative taxation regimes represent restraints on the discretionary powers of taxation of local governments. We find that average welfare is higher under discretionary and more efficient taxation regimes (in the sense of minimizing deadweight losses from distortionary taxation) when firms are highly mobile. In this situation, further limiting competition by ...
Working Paper
From urban core to wealthy towns: nonschool fiscal disparities across Connecticut municipalities
Fiscal disparities occur when economic resources and public service needs are unevenly distributed across localities. There are two equity concerns associated with fiscal disparities. First, as Yinger (1986) shows, it is not considered fair to require two otherwise-identical households to pay a different amount of taxes for the same level of public services simply because they live in different towns. Second, fiscal disparities render some towns at a disadvantage in economic competition (Downes and Pogue 1992). These towns must impose a higher tax rate and/or provide a lower level of public ...
Report
Why have revenue-strapped New England school districts been slow to turn to alternative funding sources?
During and even after the Great Recession, numerous popular press stories commented on the apparent growth of non-tax revenues in the face of school district budget deficits. But Downes and Killeen (2014) show that nationally the growth of non-traditional revenues has been far less than these articles may lead the reader to believe. This paper uses data from the New England states to assess the empirical content of some of the possible explanations of this slow growth. In New England, as in the rest of the nation, non-tax revenues per pupil have grown in real terms but have not become a more ...
Working Paper
Opting in with the Joneses: What Affects the Timing of Municipal Adoption of a Local-option Meals Tax?
States use local-option taxes to promote local revenue diversification and improve local fiscal health. However, many sub-state governments wait a long time before adopting local-option taxes or do not adopt them at all, which seems puzzling or even irrational upon first glance. This paper uses the local-option meals tax in Massachusetts as a case study to examine the factors that affect the timing of local adoptions. It finds significant positive results for adoption by neighboring municipalities, which are robust to a variety of specifications, neighbor definitions, and weighting matrices. ...
Working Paper
Not in My Backyard? Not So Fast. The Effect of Marijuana Legalization on Neighborhood Crime
This paper studies the effects of marijuana legalization on neighborhood crime using unique geospatial data from Denver, Colorado. We construct a highly local panel data set that includes changes in the location of marijuana dispensaries and changes in neighborhood crime. To account for endogenous retail dispensary locations, we use a novel identification strategy that exploits exogenous changes in demand across different locations. The change in geographic demand arises from the increased importance of access to external markets caused by a change in state and local policy. The results imply ...
Discussion Paper
Sheltering in Place? A Closer Look at Pandemic Rental Instability in Six Southeastern States
From a federal policy standpoint, the plan to stabilize renter households through the COVID-19 pandemic hinged on two actions: the implementation of a nationwide eviction moratorium and the disbursement of emergency rental assistance. This plan relied on four key expectations. First, a federal eviction moratorium was expected to prevent the displacement of renters during the pandemic. Second, it was anticipated that rental relief funds needed to quickly reach households in need to offset growing arrearages. Third, it was assumed that working members of renter households would resume their ...