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Jel Classification:H71 

Working Paper
Effects of Gentrification on Homeowners: Evidence from a Natural Experiment

A major overhaul of the property tax system in 2013 in the city of Philadelphia has generated significant variations in the amount of property taxes across properties. This exogenous policy shock provides a unique opportunity to identify the causal effects of gentrification, which is often accompanied by increased property values, on homeowners’ tax payment behavior and residential mobility. The analysis, based on a difference-in-differences framework, suggests that gentrification leads to a higher risk of delinquency on homeowners’ tax bills on average, but there was no sign of a ...
Working Papers , Paper 20-16

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 ...
Current Policy Perspectives , Paper 16-1

Working Paper
Tax Policy Endogeneity: Evidence from R&D Tax Credits

Because policymakers may consider the state of the economy when setting taxes, endogeneity bias can arise in regression models that estimate relationships between economic variables and taxes. This paper quantifies the policy endogeneity bias and estimates the impact of R&D tax incentives on R&D expenditures at the U.S. state level. Identifying tax variation comes from changes in federal corporate tax laws that heterogeneously impact state-level R&D tax incentives due to the simultaneity of state and federal corporate taxes. With this exogenous variation, my preferred estimates indicate a 1 ...
Finance and Economics Discussion Series , Paper 2014-101

Working Paper
Regional Consumption Responses and the Aggregate Fiscal Multiplier

We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data come from household-level retail purchases in Nielsen and auto purchases from Equifax credit balances. We estimate that a $1 increase in county-level government spending increases consumer spending by $0.18. We translate the regional consumption responses to an aggregate fiscal multiplier using a multi-region, New Keynesian model with heterogeneous agents and incomplete markets. Our model successfully generates the ...
Working Paper , Paper 18-4

Working Paper
Time-Geographically Weighted Regressions and Residential Property Value Assessment

In this study, we develop and apply a new methodology for obtaining accurate and equitable property value assessments. This methodology adds a time dimension to the Geographically Weighted Regressions (GWR) framework, which we call Time-Geographically Weighted Regressions (TGWR). That is, when generating assessed values, we consider sales that are close in time and space to the designated unit. We think this is an important improvement of GWR since this increases the number of comparable sales that can be used to generate assessed values. Furthermore, it is likely that units that sold at an ...
Working Papers , Paper 2019-5

Journal Article
The fiscal position of the state and local government sector: developments in the 1990s

After a difficult period during the early 1990s, the fiscal position of state and local governments has improved considerably in the past three years. States, as a group, have fared relatively well, although some local governments are still struggling with fiscal difficulties. In addition, the sector as a whole continues to face persistent underlying structural problems. This article first examines the primary budget concepts that are generally used to evaluate the fiscal condition of state and local governments. Then it surveys the status of the various levels of government, and finally, it ...
Federal Reserve Bulletin , Volume 82 , Issue Apr

Working Paper
Regional Consumption Responses and the Aggregate Fiscal Multiplier

We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data come from household-level retail purchases in Nielsen and auto purchases from Equifax credit balances. We estimate that a $1 increase in county-level government spending increases consumer spending by $0.29. We translate the regional consumption responses to an aggregate fiscal multiplier using a multi-region, New Keynesian model with heterogeneous agents and incomplete markets. Our model successfully generates the ...
Working Papers , Paper 2018-4

Report
Forecasting the New England States’ Tax Revenues in the Time of the COVID-19 Pandemic

State governments across the United States face the prospect of sharply declining tax revenues due to the COVID-19 pandemic. They need reliable and up-to-date revenue forecasts to make financially sound policy decisions during this public health and economic crisis. This paper proposes an objective, transparent, simple, and efficient method to forecast state tax revenues in this time of the COVID-19 pandemic. The model is based on only two input factors: the state unemployment rate and an empirically determined time trend. The predictions from the model closely track the actual values of tax ...
Current Policy Perspectives

Working Paper
Entrepreneurship and State Taxation

Entrepreneurship plays a vital role in the economy, yet there exists little well-identified research into the effects of taxes on startup activity. Using recently developed county-level data on startups, we examine the effect of states' corporate, personal and sales tax rates on new firm activity and test for cross-border spillovers in response to these policies. We find that new firm employment is negatively?and disproportionately?affected by corporate tax rates. We find little evidence of an effect of personal and sales taxes on entrepreneurial outcomes. Our results are robust to changes in ...
Finance and Economics Discussion Series , Paper 2018-003

Newsletter
How vulnerable are insurance companies to a downturn in the municipal bond market?

As the U.S. economy remains weakened by the Covid-19 pandemic, concern persists for the health and resilience of the municipal bond market. Municipal bonds (muni bonds) are debt securities issued by state and local governments to raise money and are generally considered to be safe investments. However, the recent slowdown in economic activity due to Covid-19 created significant stress on state and local government budgets, leading to a heightened risk for municipal bond downgrades and possibly even defaults. In this Chicago Fed Letter, we examine to what extent property and casualty (P&C) and ...
Chicago Fed Letter , Issue 451 , Pages 7

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