how much are we willing to contribute for better educational outcomes evidence from a survey experiment we use a survey experiment on a sample of argentine households to elicit willingness to contribute toward improving the performance of public school students in international educational assessments households are presented with a sequence of bids that they can accept or reject information is presented in vignettes that vary in the proportion of children who benefited from the gains in educational attainment we find a higher willingness to contribute for larger gains in total households would be willing to contribute an additional 12 8 of current educational expenditure to guarantee improved education quality jel i22 i25 c83 h52

the housing market impacts of shale gas development using data from pennsylvania and an array of empirical techniques to control for confounding factors we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source well productivity and visibility results indicate large negative impacts on nearby groundwater dependent homes while piped water dependent homes exhibit smaller positive impacts suggesting benefits from lease payments results have implications for the debate over regulation of shale gas development jel l71 q35 q53 r31 technological improvements in the extraction of oil and natural gas from unconventional sources have transformed communities and landscapes and brought debate and controversy in the policy arena shale gas plays underlying the populated northeastern united states were thought to be uneconomical less than ten years ago but now contribute a major share of us gas supply 1 natural gas has been hailed as a bridge to energy independence and a clean future because of its domestic sourcing and compared with coal and petroleum derivatives its smaller carbon footprint and reduced emissions of other pollutants e g particulates sulfur dioxide car

taxation and the allocation of risk inside the multinational firm abstract this paper provides the first theoretical and empirical analysis of how taxation shapes the joint allocation of risk and profits inside the multinational firm theoretically we identify three mechanisms through which corporate taxes may shape the within firm allocation of risk 1 transfer pricing rules requiring risk to be compensated with higher expected returns create incentives to shift risk to low tax jurisdictions as a means to shift profits 2 risk averse owners create incentives to allocate risk to high tax affiliates to maximize risk sharing with governments 3 limited loss offset creates incentives to shift risk to affiliates in other countries empirically we show that multinational firms disproportionately allocate risk to low tax countries and that the key mechanism is the nexus between risk and profits established by transfer pricing rules within firm differences in risk explain a significant fraction of the well established correlation between profits and tax rates suggesting that risk shifting is a quantitatively non negligible channel for profit shifting

consumer market segments for biofortified iron beans in rwanda evidence from a hedonic testing study an understanding of consumer market segments is important for efficient and effective targeting of new technologies such as biofortified foods in this paper we use cluster analysis to identify distinct consumer segments in rwanda for four biofortified iron bean varieties data on consumer liking of various sensory attributes of beans was collected by using a 7 point hedonic scale through the application of home use and central location tests implemented in two rural and two urban locations cluster analysis reveals the existence of several distinct consumer segments in each one of the four study locations further analysis is conducted by using multinomial probit and logit models to predict consumer segment membership based on the consumer characteristics results reveal that depending on the location consumer s source of income and whether or not they received information about nutritional benefits of the iron bean varieties have a bearing on their preference of these varieties the paper presents a profile of each one of the consumer market segments identified to assist targeting of various iron bean delivery marketing and promotion efforts in rwanda

the effects of tax convexity on default and investment decisions the objective of this article is to examine how default and investment triggers change under different levels of tax asymmetry when firms face nonlinear tax schedules under a convex tax schedule profits are taxed at a higher rate while losses are taxed or rebated at a lower rate thus reducing the risk shared by the government this article presents a dynamic model based on the contingent claims framework to explore the impacts of tax convexity on the triggers and we find that the impacts vary significantly depending on several countervailing forces tax convexity has a nonmonotonic relationship with both the default and investment triggers because of the government s risk sharing role the default trigger is higher when tax convexity increases while the growth option exerts a counteracting effect that lowers this trigger creating an ambiguity in the investment trigger when changing the level of tax asymmetry

dividend taxes corporate investment and q abstract taxes on corporate distributions have traditionally been regarded as a double tax on corporate income this view implies that while the total effective tax rate on corporate source income affects real economic decisions the distribution of this tax burden between the shareholders and the corporation is irrelevant recent research has suggested an alternative to this traditional view one explanation of why firms in the united states pay dividends in spite of the heavy tax liabilities associated with this form of distribution is that the stock market capitalizes the tax payments associated with corporate distributions this capitalization leaves investors indifferent at the margin between a corporation s decision to pay out dividends or to retain earnings this alternative view holds that while changes in the dividend tax rate will affect shareholder wealth they will have no impact on corporate investment decisions this paper develops econometric tests which distinguish between these two views of dividend taxation by extending tobin s q theory of investment to incorporate taxes at both the corporate and personal levels the implications of each view for corporate investment decisions can be derived the competing views may be tested by comparing the performance of investment equations estimated under each theory s predictions british time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial postwar variation in effective tax rates on corporate distributions the econometric results suggest that dividend taxes have important effects on investment decisions

do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

valuing nuclear energy risk evidence from the impact of the fukushima crisis on u s house prices abstract behavioral economics suggests that individuals overweight recent unexpected and or rare events when updating beliefs this study investigates the effect of such an event the fukushima nuclear crisis in 2011 on the learning process of a local environmental risk by evaluating how perceptions of the risk of a nuclear accident are capitalized into house prices near nuclear power plants npps in the u s our results provide new evidence on the dynamics of the effect spatially the impact was concentrated in a 4 km radius around npps and temporally it peaked a half year later and dissipated one year after the crisis

an estimate of the accuracy of hedonic real estate valuations using the orange county bankruptcy it has become standard practice to estimate the value of amenities such as environmental cleanliness local school quality and crime using hedonic valuations typically changes in real estate prices the accuracy of hedonic valuations depends critically on whether real estate prices adjust appropriately which is difficult to verify the 1994 orange county ca bankruptcy offers a test of the accuracy of hedonic real estate valuations orange county s failed investment strategy resulted in unexpected county losses of 1 7 billion in response the aggregate value of orange county real estate dropped by between 1 65 and 3 70 billion

using maimonides rule to estimate the effect of class size on scholastic achievement the twelfth century rabbinic scholar maimonides proposed a maximum class size of 40 this same maximum induces a nonlinear and nonmonotonic relationship between grade enrollment and class size in israeli public schools today maimonides rule of 40 is used here to construct instrumental variables estimates of effects of class size on test scores the resulting identiecation strategy can be viewed as an application of donald campbell s regression discontinuity design to the class size question the estimates show that reducing class size induces a signiecant and substantial increase in test scores for fourth and efth graders although not for third graders when asked about their views on class size in surveys parents and teachers generally report that they prefer smaller classes this may be because those involved with teaching believe that smaller classes promote student learning or simply because smaller classes offer a more pleasant environment for the pupils and teachers who are in them mueller chase and walden 1988 social scientists and school administrators also have a longstanding interest in the class size question class size is often thought to be easier to manipulate than other school inputs and it is a variable at the heart of policy debates on school quality and the allocation of school resources in many countries see e g robinson 1990 for the united states ofsted 1995 for the united kingdom and moshel ravid 1995 for israel this broad interest in the consequences of changing class size

irreversible investment and endogenous financing abstract we evaluate the effects of corporate taxation on firms investment and financing choices we focus on how the asymmetry of the corporate tax imperfect loss carry overs endogenous financing with credit constraints and different degrees of investment irreversibility affect both incremental investment and entry decisions we find that as long as capital can be financed with debt at the margin the tax distortions on the marginal investment decision are small this is particularly so if the technology is flexible in contrast the tax distortions on the entry decision are substantial the ability of firms to carry over their losses and choose their financial structure endogenously are important for reducing both types of distortions

tax asymmetries the cost of capital and investment some evidence from united kingdom panel data a measure of the cost of capital is developed that incorporates the dynamic effects of tax changes and tax asymmetries estimates of the cost of capital are made using an unbalanced panel of 1987 u k quoted companies over the period 1971 to 1984 there is wide cross sectional variation in the cost of capital the measure is used in estimating an equation where this cross sectional variation is found to be a significant determinant of the level of company investment copyright 1989 by royal economic society

the significance of tax law asymmetries an empirical investigation this study uses tax return data for u s nonfinancial corporations for the period 1971 1982 to estimate the importance of restrictions on the ability of firms to use tax credits and to obtain refunds for tax losses our results suggest that the incidence of such unused tax benefits increased substantially during the early 1980s though we do not find these increases attributable to increased investment incentives during that period we present estimates of the marginal tax rate on interest payments which take into account unused tax benefits and emphasize the importance of distinguishing current tax payments from marginal tax rates in estimating the incentive to invest

how financial incentives induce disability insurance recipients to return to work using a local randomized experiment that arises from a sharp discontinuity in disability insurance di policy in norway we provide transparent and credible identification of how financial incentives induce di recipients to return to work we find that many di recipients have considerable capacity to work that can be effectively induced by providing financial work incentives we further show that providing work incentives to di recipients may both increase their disposable income and reduce program costs our findings also suggest that targeted policies may be the most effective in encouraging di recipients to return to work

is what you see what you get the value of natural landscape views views of natural areas and green space may have value quite apart from access to those lands using 25 years of home sales data from st louis county missouri and modern geographic information system tools to measure views we estimate a hedonic property fixed effects model that captures the effects of changing land cover on house sale prices unlike previous studies our approach minimizes bias from omitted variables and uniquely captures changes over time we find that forest views negatively affect home prices whereas farmland views have positive effects changes in relative scarcity of these land types over time may explain the findings

measuring investment in education historic debates about the measurement of capital are even more complicated in the case of education and human capital as extensive research demonstrates education resources are not consistently related to student performance in existing elementary and secondary schools this inefficiency in public schools implies that spending and resource measures do not accurately capture variations in school quality this finding then has clear implications for both education policy and economic research because school inputs are poor policy instruments an alternative policy focus that appears much more productive is performance incentives related to student achievement

promise scholarship programs as place making policy evidence from school enrollment and housing prices abstract place based promise scholarship programs which guarantee financial aid for qualifying graduates of a school district have proliferated in recent years using data from multiple sites we compare the evolution of school enrollment and residential real estate prices around program announcement dates within promise eligible and surrounding areas while our estimates indicate that enrollment increased following promise announcements merit based programs generated relative increases in white enrollment housing prices respond strongly in neighborhoods with better primary schools and in the upper half of the housing price distribution we conclude that these programs have important and under studied distributional considerations

information branding certification and consumer willingness to pay for high iron pearl millet evidence from experimental auctions in maharashtra india abstract in this paper we use hedonic testing methods adopted from food science literature and the becker degroot marschak mechanism adopted from economic valuation literature to estimate consumer demand for biofortified high iron pearl millet hipm in maharashtra india unlike biofortification with provitamin a biofortification with minerals such as iron and zinc does not change the color or the appearance of the biofortified crop therefore we test the impact of both nutrition information and branding and certification as well as the nature of the brand and of the certifying authority state level versus international on consumer demand for hipm we find that even in the absence of nutrition information consumers assign a small but significant premium to the hipm variety relative to the local variety this is consistent with consumers more favorable rating of the sensory characteristics of the high iron variety nutrition information on the health benefits of hipm increases this premium substantially and regression analysis reveals that consumers prefer international branding and international certification authority to their state level counterparts

centralization fiscal federalism and private school attendance a cge model is used to analyze the impact of public school financing on private school attendance the common perception that public school finance centralization will necessarily lead to greater private school attendance is not correct in such a model even when that centralization involves an extreme equalization as in california furthermore if centralization is less dramatic as in most states declines in private school attendance are even more pronounced this weakens the speculation that low exit rates to private schools in centralizing states imply that general public school quality does not drop as a result of such centralization

biased perceptions of income distribution and preferences for redistribution evidence from a survey experiment abstract individual perceptions of income distribution play a vital role in political economy and public finance models yet there is little evidence regarding their origins or accuracy this study examines how individuals form these perceptions and explores their potential impact on preferences for redistribution a tailored household survey provides original evidence on systematic biases in individuals evaluations of their own relative position in the income distribution the study discusses one of the mechanisms that may generate such biases based on the extrapolation of information from endogenous reference groups and presents some suggestive evidence that this mechanism has significant explanatory power the impact of these biased perceptions on attitudes toward redistributive policies is studied by means of an experimental design that was incorporated into the survey which provided consistent information on the own ranking within the income distribution to a randomly selected group of respondents the evidence suggests that those who had overestimated their relative position and thought that they were relatively richer than they were tend to demand higher levels of redistribution when informed of their true ranking

effects and value of verifiable information in a controversial market evidence from lab auctions of genetically modified food food products containing genetically modified gm ingredients have entered the market over the past decade the biotech industry and environmental groups have disseminated conflicting private information about gm foods this paper develops a unique methodology for valuing independent third party information in such a setting and applies this method to consumers willingness to pay for food products that might be gm data are collected from real consumers in an auction market setting with randomized information and labeling treatments the average value of third party information per lab participant is small but the public good value across u s consumers is shown to be quite large jel c91 d12 d82

combining quantitative and qualitative methods in assessing chronic poverty the case of rwanda this paper addresses the issue of chronic poverty in rwanda an issue which has not been addressed specifically in the policy debate despite the fact that it is likely to be widespread in part this has reflected lack of available evidence in that the conventional sources used to analyze chronic poverty are not available we argue in this paper that by judicious combination of existing qualitative a high quality nationwide participatory poverty assessment and quantitative sources a household survey it is possible to identify and characterize a clearly distinct group of chronically poor households whose characteristics are different from the poor as a whole

the economic impacts of climate change evidence from agricultural output and random fluctuations in weather fisher et al 2012 hereafter fhrs have uncovered coding and data errors in our paper deschenes and greenstone 2007 hereafter dg we acknowledge and are embarrassed by these mistakes we are grateful to fhrs for uncovering them we hope that this reply will also contribute to advancing the literature on the vital question of the impact of climate change on the us agricultural sector fhrs main critiques of dg are as follows i there are errors in the weather data and climate change projections used by dg ii the climate change projections are based on the hadley 2 model and scenarios rather than the more recent hadley 3 model and scenarios iii standard errors are biased due to spatial correlation iv the inclusion of state by year fixed effects does not leave enough weather variation to obtain meaningful estimates of the relationship between agriculture profits and weather v storage and inventory adjustment in response to yield shocks invalidate the use of annual profit data and vi fhrs argue that a better specified hedonic model produces robust estimates unlike the results reported in dg four of these critiques have little basis and we respond to them here in the introduction specifically with respect to ii the more recent daily climate predictions were not available when we wrote dg nevertheless the most important issue is providing the reliable estimates of climate change and in this note we report estimates based on the climate model we used in dg and a more recent one that we gained access to in the meantime iii in the primary table on agricultural profits dg reports two sets of standard errors with the first clustered at the county level and the second based on a variance covariance matrix that accounts for spatial correlation using the method proposed in conley 1999 thus the claim of fhrs 2012 seems overblown nevertheless to ease comparisons of papers in this literature this note will adopt the fhrs convention of reporting estimated standard errors clustered at the county and state levels we find that inference is largely unaffected by the choice between these different assumptions about the variance covariance matrix

income taxes and the destination of movers to multistate msas abstract we examine how differences in state income tax rates as well as other state and local taxes and public service expenditures influence the choice of state of residence for households federal tax filers moving into multistate metropolitan areas msas using data from the irs on the migration of taxpayers msas that are on borders provide a spatial discontinuity discrete differences in state tax rates within a single labor market these msas allow residents to live in one state and work in another state we find that differences in state income tax rates have a significant impact on the relative rate of migration to the states within an msa however contrary to what would be expected this impact is only significant in msas in which the filing state is based on employment states without reciprocity and not for those states in which the filing state is the state of residence states with reciprocity in msas where states do not have reciprocity agreements a difference of ten percent in tax rates leads to a 4 1 percent difference in the relative rate of incoming taxpayers analogously we find that a ten percent difference in state tax rates in these msas results in a 3 3 percent difference in the rate of tax base inflow agi our results suggest that one reason that differences in state income taxes appear to have more impact in multistate msas without reciprocity is that only relatively large differences in state income tax rates have any impact on migration and these differences are much more pronounced in msas without reciprocity

combining participatory crop trials and experimental auctions to estimate farmer preferences for improved common bean in rwanda abstract participatory crop improvement raises the prospects for developing seed varieties that meet the needs of subsistence farmers but may face challenges regarding preference elicitation particularly in complicated policy environments we integrate binding experimental auctions with participatory variety selection to elicit farmers preferences for improved common bean varieties in rwanda we find that auctions reveal farmer preferences more accurately than stated nonbinding rankings in this context and that participatory on farm crop research is essential to understanding how farmers evaluate tradeoffs between multiple crop attributes we also find that farmers highly value intercrop yield despite government policy that encourages farmers to monocrop

schools and housing markets an examination of school segregation and performance in connecticut this paper estimates a dynamic model of price level school performance and school racial and ethnic composition in the state of connecticut the paper finds that increasing minority representation in a labor market area reinforces the existing pattern of school segregation changes in segregation appear to be influenced by demographic trends in urban areas and by the labour market factors that determine those trends there is no evidence however to suggest that this process affects housing prices rather the housing market appears to adjust relatively quickly

valuing rail access using transport innovations this paper uses a powerful empirical method to evaluate the benefits of rail access to consumers we study the effects on house prices of a transport innovation that altered the distance to the nearest station for some households but left others unaffected the transport innovation we study is the construction of new stations in london in the late 1990s using this innovation we implement a quasi experimental approach that allows us to avoid the biases inherent in cross sectional valuation work our evidence on distance station effects on local prices identified through distance changes induced by the transport innovation suggests that households value rail access and that these valuations are large compared to the valuations of other local amenities

how elastic are preferences for redistribution evidence from randomized survey experiments we analyze randomized online survey experiments providing interactive customized information on us income inequality the link between top income tax rates and economic growth and the estate tax the treatment has large effects on views about inequality but only slightly moves tax and transfer policy preferences an exception is the estate tax informing respondents of the small share of decedents who pay it doubles support for it the small effects for all other policies can be partially explained by respondents low trust in government and a disconnect between concerns about social issues and the public policies meant to address them jel d31 d72 h23 h24

sorting over flood risk and implications for policy reform abstract do individuals sort across flood risk this paper applies a boundary discontinuity design to a residential sorting model to provide novel estimates of sorting across flood risk by race ethnicity and income we find clear evidence that low income and minority residents are more likely to move into high risk flood zones we then highlight the overall and distributional implications of proposed price and information reforms to the u s national flood insurance program while such reforms are likely welfare increasing overall heterogeneous behavioral responses yield significant distributive effects that also alter the composition of residents in harm s way

the welfare economics of land use planning abstract this paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning the technique is applied in the context of the town and country planning system of the uk and examines the gross and net benefits of land use regulation and their distribution across income groups the results show that the welfare and distributional impacts can be large

corporation tax asymmetries and investment evidence from uk panel data theoretical work has emphasised the potentially powerful impact of corporation tax asymmetries on investment behaviour but empirical work has mainly been confined to the measurement of effective tax rates this paper uses panel data from 597 u k companies to ask are tax asymmetries important to understanding observed investment behaviour an optimising investment model is developed and estimated both as a q equation and a euler equation in which the cost of capital appears careful modelling of asymmetries does not noticeably improve the empirical performance of these equations possible explanations are discussed

leasing taxes and the cost of capital abstract a model of firm financial and investment behaviour when there is a possibility of tax exhaustion is used to analyse the incentives for firms to act as lessees or lessors and the determination of the equilibrium rental rate in the leasing market a number of results emerge which are relevant for public policy it is shown that i leasing may diminish aggregate investment by comparison with the situation when it does not occur ii rents are likely to be earned on leasing activities and iii a purely tax induced positive relationship exists between aggregate investment and corporate profits

valuing the urban hukou in china evidence from a regression discontinuity design for housing prices abstract this paper explores the demand side of hukou household registration acquisition in china by estimating the market valuation of urban hukou based on jinan city s acquiring the hukous by purchasing houses policy this paper uses houses with a floor area slightly larger and slightly smaller than the minimum required as the treatment and control groups respectively to implement a regression discontinuity design the results show that residents willingness to pay for urban hukou in jinan city was approximately 90 000 126 000 yuan in 2017 we also find great heterogeneity in different housing submarkets the value of hukou is much higher in immigrant dominated housing markets and top primary school districts our findings are robust to parametric and nonparametric estimates and different model specifications we perform falsification tests by assuming a false policy introduction date and placebo tests based on rental data our analysis offers insights for hukou system reform and public services provision

farmers preferences for crop variety traits lessons for on farm conservation and technology adoption although in situ conservation is increasingly considered an efficient way of conserving plant genetic resources little is known about the incentives and constraints that govern conservation decisions among small farm holders in developing countries using a choice experiment approach we investigated ethiopian farmers crop variety preferences estimated the mean willingness to pay for each crop variety attribute and identified household specific and institutional factors that governed the preferences we found that environmental adaptability and yield stability are important attributes for farmers choice of crop varieties farmers are willing to forego some extra income or yield to obtain a more stable and environmentally adaptable crop variety among other things household resource endowments particularly land holdings and livestock ownership years of farming experience and contact with extension services are the major factors causing household heterogeneity of crop variety preferences based on our experimental results we derived important policy implications for on farm conservation breeding priority setting and improved variety adoption in ethiopia c 2010 elsevier b v all rights reserved less

an empirical estimate of corporate tax refundability and effective tax rates the provisions of generous tax incentives during the 1970s and the recession of the early 1980s led to a marked increase in the number of nontaxable corporations in canada during the 1977 to 1982 period over 40 percent of investment was done by corporations that were rarely taxable 30 percent by corporations that were normally taxable and the balance undertaken by corporations that were taxable about half the time 1 the degree to which taxable losses can be used to shelter other forms of taxable income has important implications with regard to the study of effective tax rates on capital income this paper attempts to quantify the impact of imperfect loss offsetting or refundability on industry effective tax rate measurements section ii of this note provides an estimate of the extent to which tax losses are written off current or future taxable income in a present value sense refundability is measured by discounting the estimated proportion of a taxable loss written off by companies through carryback and carryforward provisions section iii uses the refundability measures to estimate effective tax rates on canadian firms by industry three cases are compared i the taxpaying firm this firm expects to use all deductions and credits immediately ii the nontaxpaying firm this firm expects to be nontaxpaying with probability 1 in the period in which new investment is undertaken marginal tax losses on new investment are used up slowly over time

comparing open ended choice experiments and experimental auctions an application to golden rice we use two experimental valuation methods to estimate consumer demand for genetically modified golden rice the first is an open ended choice experiment oece where participants name the quantities of golden rice and conventional rice demanded at each of several price combinations one of which will be randomly chosen as binding this allows us to estimate market demand by aggregating demand across participants this estimate of market demand also allows us to estimate own price elasticity and consumer surplus for golden rice comparing willingness to pay wtp estimates from the oece with those from a uniform price auction we find that oece wtp estimates exhibit less affiliation across rounds and the effects of positive and negative information under the oece are more consistent with prior expectations and existing studies we also find that while auction wtp estimates more than double across five rounds oece wtp estimates are stable across rounds and are always roughly equal to those from the final auction round

the impact of improved maize varieties on poverty in mexico a propensity score matching approach summary this study examines the adoption of improved maize germplasm in oaxaca and chiapas in mexico it employs a propensity score matching approach to analyze the impact of the adoption of improved maize varieties on household income and poverty reduction using cross sectional data of 325 farmers from the two regions the findings reveal a robust positive and significant impact of improved maize variety adoption on farm household welfare measured by per capita expenditure and poverty reduction specifically the empirical results suggest that adoption of improved maize varieties helped raise household per capita expenditure by an average of 136 173 mexican pesos thereby reducing their probability of falling below the poverty line by roughly 19 31

cross border loss offset can fuel tax competition following recent court rulings cross border loss compensation for multinational firms has become a major policy issue in europe this paper analyzes the effects of introducing a coordinated cross border tax relief in a setting where multinational firms choose the size of a risky investment and host countries non cooperatively choose tax rates we show that coordinated cross border loss compensation may intensify tax competition when following current international practice the parent firm s home country bases the tax rebate for a loss making subsidiary on its own tax rate in equilibrium tax revenue losses may thus be even higher than is implied by the direct effect of the reform in contrast tax competition is mitigated when the home country bases its loss relief on the tax rate in the subsidiary s host country

hedonic markets and sorting equilibria bid function envelopes for public services and neighborhood amenities abstract hedonic regressions with house value as the dependent variable are widely used to study public services and neighborhood amenities this paper builds on the theory of household bidding and sorting across communities to derive bid function envelopes which provide a form for these regressions this approach allows for household heterogeneity and multiple amenities yields estimates of the price elasticity of amenity demand directly from the hedonic without a rosen two step procedure and provides tests of hypotheses about sorting an application to cleveland area data from 2000 yields price elasticities for school quality and neighborhood ethnic composition and supports the sorting hypotheses

the dynamic effects of tax law asymmetries under the laws of most countries a distinction is made between gains and losses by businesses losses that must be carried forward are subjept to two penalties a loss of interest and expiration previous examinations have focused on the higher expected tax payments such a tax system without full loss offset imposes on risky projects this paper presents a dynamic analysis of the impact of taxation on investment when gains and losses are treated asymmetrically the results demonstrate how firm characteristics and the timing of taxes can influence behaviour under current u s tax law a distinction is made between gains and losses by businesses for corporations gains are taxed at what is essentially a flat rate of 46 while losses do not necessarily qualify for a refund at the same rate to obtain an immediate refund the taxpayer must have had taxable income during the three previous years in excess of the current loss any losses that cannot be carried back in this fashion must be carried forward subject to two implicit penalties such loss carryforwards earn no interest and they expire after fifteen years similar provisions apply in other countries hence businesses investing in risky projects for which the probability of having to carry losses forward is positive can expect to pay higher taxes than they would under a system with full loss offset i e the immediate refund of taxes for losses incurred many corporations

investment incentives and corporate tax asymmetries abstract recent facts on the importance of corporate losses motivate more careful study of the impact of tax incentives for investment on firms that lose money i model firm investment decisions in a setting featuring financing constraints and carrybacks and carryforwards of operating losses i estimate investment responses to tax incentives allowing effects to vary with cash flows and taxable status results suggest that asymmetries in the corporate tax code could have made recent bonus depreciation tax incentives at most 4 less effective than they would have been if all firms were fully taxable cash flows have more important effects on the impact of tax incentives recent declines in cash flows would predict a 24 decrease in the effectiveness of bonus depreciation results thus suggest that tax incentives have the smallest impact on investment exactly when they are most likely to be put in place during downturns in economic activity when cash flows are low

valuing school quality better transport and lower crime evidence from house prices housing prices within urban areas exhibit highly localized variation that cannot be explained solely by differences in the physical attributes of dwellings we consider the role of local amenities and disamenities in generating price variation within urban areas focusing on three highly policy relevant urban issues transport accessibility school quality and crime our survey of the recent empirical literature highlights what is known and what is not known on these issues and considers the relevance and reliability of this evidence for policy design and evaluation although there are serious empirical challenges we argue that research on housing values based on careful research designs can offer credible estimates of the social value of place specific attributes and amenities

estimating consumer willingness to pay for food quality with experimental auctions the case of yellow versus fortified maize meal in kenya biofortification of maize with provitamin a carotenoids is a new approach to the alleviation of vitamin a deficiencies in africa unfortunately these varieties are yellow or orange while consumers generally prefer white consumer willingness to pay for yellow and fortified maize was compared in experimental auctions in three regions in kenya the premium that consumers are willing pay for fortified maize 24 was higher than the discount they require to buy yellow maize 11 and in one zone consumers prefer yellow yellow color is therefore not an impossible obstacle for biofortified maize although it would clearly be easier to introduce this maize first in regions where yellow maize is currently grown

the impact of research grant funding on scientific productivity in this paper we estimate the impact of receiving an nih grant on subsequent publications and citations our sample consists of all applications unsuccessful as well as successful to the nih from 1980 to 2000 for standard research grants r01s both ols and iv estimates show that receipt of an nih research grant worth roughly 1 7 million leads to only one additional publication over the next five years which corresponds to a 7 percent increase the limited impact of nih grants is consistent with a model in which the market for research funding is competitive so that the loss of an nih grant simply causes researchers to shift to another source of funding

house price responses to a national property tax reform abstract we show that house prices in general did not respond to a substantial cut in the national property tax in sweden the estimates are based on rich register data covering more than 100 000 sales over a time period of two and a half years because the swedish property tax is national and thus unrelated to local public goods our setting is ideal for causal identification of the property tax on house prices we observe price increases only in a small segment of the market containing properties with very high tax values we discuss but can admittedly not empirically discriminate between several potential explanations for why we find no evidence of capitalization except for the top segment of the market

tax incentives for business investment a primer for policy makers in developing countries abstract the use of tax incentives is widespread even though the available empirical evidence on the cost effectiveness of such incentives in stimulating investment is highly inconclusive this paper is primarily intended as a primer on the use of tax incentives for policy makers especially those in developing countries it discusses the objectives cost effectiveness and transparency of implementing tax incentives assesses the comparative merits of alternative forms of such incentives and provides a review of the empirical literature its main conclusions are that the justification for the use of tax incentives should be limited to the rectification of market failures and that the preferred form of tax incentives are those that provide for faster recovery of investment costs

stratification and public utility services in colombia subsidies to households or distortion of housing prices domiciliary public utility services in colombia have a cross subsidy system which charges subsidized rates to the households who live in houses located in strata associated to low wealth levels and taxed rates to the better off we assesses the hypothesis that the flow of subsidies that potentially come from a particular house are discounted by housing market agents so that most of them are transferred to the prices of the houses that generate the subsidies by estimating a hedonic prices model applying a regression discontinuity approach we find that the increment in house value estimated because of subsidies is similar in magnitude to the present value of the flow of subsidies likely effects are found on the rent amount we conclude that subsidies to the poor population through public spending in domiciliary public utility services in colombia is being achieved if anything in a very limited way most of the financial effort on this subject ends up distorting housing relative prices according to socioeconomic strata with an annual cost of up to 0 7 of gdp in supposed gross subsidies to domiciliary public utility services

the importance of local corporate taxes in business location decisions evidence from french micro data determinants of businesses locations are known to be multiple locations of partners and competitors are crucial as well as the territory s local characteristics to consider the importance of local taxes we build a poisson model to explain the number of business creations observed in a given municipality first results suggest that there are unobserved factors driving firm creation that are positively correlated with the level of local taxes to deal with this potential source of endogeneity we present an approach close to regression discontinuity design we find that everything else being equal higher local taxes actually tend to deter firms from setting up in a given zone but the effect is weak

fiscal policy profits and investment this paper evaluates the effects of fiscal policy on investment using a panel of oecd countries we find a sizeable negative effect of public spending and in particular of its wage component on profits and on business investment this result is consistent with different theoretical models in which government employment creates wage pressure for the private sector various types of taxes also have negative effects on profits but interestingly the effects of government spending on investment are larger than those of taxes our results can explain the so called non keynesian i e expansionary effects of fiscal adjustments jel e22 e62

taxation and the cost of capital the uk experience since the 1960s the uk has witnessed a series of reforms to its corporation tax system these include the creation of corporation tax as an independent tax in 1965 the gradual introduction of generous capital allowances in the early 1970s the introduction of the partial imputation system in 1973 and stock relief in 1975 and the 1984 reforms which reduced the tax rate and capital allowances and abolished stock relief a number of these reforms were designed with the specific intention of influencing company decisions regarding investment and finance through the real cost of capital

does the market value value added evidence from housing prices after a public release of school and teacher value added value added data are an increasingly common evaluation tool for schools and teachers many school districts have adopted these methods and released the results publicly in this paper we study the release of value added data in los angeles by the los angeles times newspaper to identify how measured value added is capitalized into housing prices this analysis is the first in the us school valuation literature to examine property value responses to a value added information shock which is of interest as this measure is less correlated with demographics than typical school quality measures unique to this setting as well is the release of both school and teacher level value added data which allows us to examine how property values respond to both types of information using a difference indifferences methodology surrounding the release we find that neither school nor teacher value added scores are capitalized into home prices our results suggest that despite the contentiousness following these data releases homeowners do not consider value added models as currently constructed to be a relevant school quality measure on the margin

social stigma and asset value recent attempts by economists to identify and quantify the effect of social stigma on asset value have often been stymied by confounding mechanisms i use the unique circumstances surrounding the 1999 columbine shooting to estimate the effect of social stigma on asset value using a difference in differences model with property fixed effects i find the immediate effect of stigma from the columbine shooting is 5 7 of a property s value after one year this implies a 13 million loss from property sales in the year 2000 alone the results are robust to numerous specifications and synthetic control placebo tests this suggests that social stigma plays a role in consumer preferences

dynamic factor demands and the effects of energy price shocks a dynamic model is used to understand how sharp changes in energy prices affect investment behavior employment and energy use the authors discuss the theory behind their model selection model specifications estimation methods and data list parameter estimates and elasticities for the selected model and describe the simulations they conclude that 1 the data strongly reject the hypothesis of constant returns to scale within their specification of aggregate production 2 the data indicate adjustment costs on labor are small and 3 their results help reconcile some of the conflicting estimates of energy demand elasticities appearing in recent literature 23 references 3 figures 3 tables

corporation tax finance and the cost of capital this paper examines the influence of corporate tax exhaustion on the firm s financial and investment decisions a dynamic programming model is used to establish effective marginal tax rates in the presence of a tax system that permits the carry forward of losses to future periods the paper demonstrates that internal optimal financial structures may result which do not require the imposition of external constraints the cost of capital is highly sensitive to the current taxable earnings of the firm and the implications of this for such tax transfer activities as leasing are discussed

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

dynamic factor demands under rational expectations we model the industrial demands for structures equipment and blue and white collar labor in a manner consistent with rational expectations and stochastic dynamic optimization in the presence of adjustment costs but allowing generality of functional form we represent the technology by a translog input requirement function that specifies the amount of blue collar labor needed to produce an output level given quantities of three quasi fixed factors nonproduction workers equipment and structures a complete description of the production structure is obtained by simultaneously estimating the input requirement function and three stochastic euler equations we find adjustment costs are small in total but large on the margin and differ considerably across factors

corporate tax incentives and capital structure new evidence from uk firm level tax returns abstract we investigate how companies capital structure is affected by corporate income taxes using confidential company level tax returns for a large sample of uk firms exploiting variation in companies marginal tax rates we find a positive and substantial long run tax effect on leverage leverage responds more to decreases in the marginal tax rate and it responds to changes in the marginal rather than the average tax rate most importantly we find that the marginal tax rate based on tax returns has greater explanatory power for companies leverage than the marginal tax rate based on financial statements our study suggests that errors in the measurement for tax incentives using financial statements could lead to underestimation of the tax effects on capital structure

the value of heterogeneous property rights and the costs of water volatility the system of prior appropriation in the western unites states prioritizes property rights for water based on the establishment of beneficial use creating a hierarchy where rights initiated first are more secure i estimate the demand for security in water rights through their capitalization in agricultural property markets in the yakima river basin a major watershed in washington state all water rights are satisfied in an average year so the relative value of secure property rights is a function of water supply volatility and the costs of droughts are predominantly born by those with weak rights in aggregate security in water rights does not capitalize into property values at the irrigation district level however there is heterogeneity in the premium for secure water rights the lack of a premium for district level water security is robust to a variety of econometric methods to account for correlated district unobservables and the null result produces an economically significant upper bound on the value to water security for the district the ability for farmers to adapt to water supply volatility as well as expectations about water markets and government infrastructure investment are leading explanations for the lack of an aggregate premium these explanations are supported by the pattern of heterogeneity in the water security premium

what do parents value in education an empirical investigation of parents revealed preferences for teachers this paper examines revealed preferences of parents for their children s education using parent requests for individual elementary school teachers and information on teacher attributes including principal reports of teacher characteristics that are typically unobservable on average parents strongly prefer teachers whom principals describe as good at promoting student satisfaction though they also value teacher ability to raise academic achievement these aggregate effects mask striking differences across schools families in higher poverty schools strongly value student achievement and appear indifferent to the principal s report of a teacher s ability to promote student satisfaction the results are reversed for families in wealthier schools

how do school report cards affect school choice decisions we estimate the effect of information about school achievement that is disseminated to the public through websites and school report cards on school choice decisions we find that students are more likely to leave their school when public information reveals poor school level performance some parents school choice decisions respond to information soon after it becomes available others including non english speaking parents alter their school choice decisions only in response to information that has been disseminated widely and discussed in the media parents in low income neighbourhoods are most likely to alter their school choice decisions in response to new information jel classification i21 d83 les auteurs evaluent les effets de l information sur la performance des ecoles diffusee au public via les sites web ou les bulletins sur les decisions de choix d ecole il appert que les etudiants sont davantage susceptibles de quitter leur ecole quand l information publique revele sa pauvre performance les decisions de choix d ecole par certains parents repondent a l information tot apres que l information devient disponible d autres incluant les parents dont l anglais n est pas la premiere langue ne modifient leurs decision de choix d ecole qu en reponse a une information qui a ete vastement disseminee et discutee dans les medias les parents des milieux defavorises sont moins susceptibles de modifier leur decision de choix d ecole en reponse a l information nouvelle

estimating the effect of financial aid offers on college enrollment a regression discontinuity approach an important problem faced by colleges and universities that of evaluating the effect of their financial aid offers on student enrollment decisions is complicated by the likely endogeneity of the aid offer variable in a student enrollment equation this article shows how discontinuities in an east coast college s aid assignment rule can be exploited to obtain credible estimates of the aid effect without having to rely on arbitrary exclusion restrictions and functional form assumptions semiparametric estimates based on a regression discontinuity rd approach affirm the importance of financial aid as an effective instrument in competing with other colleges for students

the relation between firm growth and q with multiple capital goods theory and evidence from panel data on japanese firms we derive from a model of investment with multiple capital goods a one to one relation between the growth rate of the capital aggregate and the stock market based q we estimate the growth q relation using a panel of japanese manufacturing firms taking into account the endogeneity of q identification is achieved by combining the theoretical structure of the q model and an assumed serial correlation structure of the technology shock which is the error term in the growth q equation for early years of our sample cash flow has significant explanatory power over and above q the significance of cash flow disappears for more recent years for the heavy industry when japanese capital markets was liberalized the estimated q coefficient implies that the adjustment cost is less than a half of gross profits net of the adjustment cost

applying regression discontinuity designs to american political development students of american political development apd have long been interested in questions related to the development of state capacity in the united states the apparent macro level nature of those questions may appear to discourage the pursuit of micro level causal inferences yet attention to causal inference is not necessarily incompatible with inquiry into macro level phenomena this article explores the application of a specific causal inference strategy namely regression discontinuity design rdd to three questions of interest to apd scholars of state capacity first the article illustrates the use of a geographic rdd to estimate the causal impacts of a reconstruction era federal civil rights statute during the period prior to the development of significant federal state capacity second it explores the possible causes of the late 19th century decline in the use of monetary rewards to motivate civil servants by using a population based rdd to estimate the causal impacts of financial incentives on law enforcement effort and civilian compliance third it illustrates an opportunity to test claims about the impacts of the growth of the carceral state by applying a resource constraint rdd to estimate the causal impacts of law enforcement effort on a variety of outcomes

exploring mortgage interest deduction reforms an equilibrium sorting model with endogenous tenure choice in most equilibrium sorting models esms of residential choice across neighborhoods the question of whether households rent or buy their home is either ignored or else tenure status is treated as exogenous of course tenure status is not exogenous and households tenure choices may have important public policy implications particularly since higher levels of homeownership have been shown to correlate strongly with various indicators of improved neighborhood quality indeed numerous policies including that of mortgage interest deduction mid have been implemented with the express purpose of promoting homeownership this paper presents an esm with simultaneous rental and purchase markets in which tenure choice is endogenized and neighborhood quality is partly determined by neighborhood composition the public policy relevance of the model is shown through a calibration exercise for boston massachusetts which explores the impacts of various reforms to the mid policy the simulations confirm some of the arguments made about reforming mid but also demonstrate how the complex patterns of behavioral change induced by policy reform can lead to unanticipated effects the results suggest that it may be possible to reform mid while maintaining the prevailing rates of homeownership and reducing the federal budget deficit

teaching new markets old tricks the effects of subsidized investment on low income neighborhoods abstract this paper examines the effects of investment subsidized by the federal government s new markets tax credit nmtc program which provides tax incentives to encourage private investment in low income neighborhoods i identify the impacts of the program by taking advantage of a discontinuity in the rule determining the eligibility of census tracts for nmtc subsidized investment using this discontinuity as a source of quasi experimental variation in commercial development across tracts i find that subsidized investment has modest positive effects on neighborhood conditions in low income communities though spillovers appear to be small and crowd out incomplete the results suggest that some of the observed impacts on neighborhoods are attributable to changes in the composition of residents as opposed to improvements in the welfare of existing residents

residential property price differentials of waste plants evidence from beijing china as a primary source of urban pollution waste plants release toxic gases and polluted waste water that can cause great harm to human health and contaminate water resources the adverse impact of wa

the effect of school capital investments on local housing markets and household sorting in california abstractin this paper i investigate what effect school capital investments have on housing values and household location choice in the context of the tiebout model this research identifies an exogenous variation in school capital investments by exploiting the lottery allocation of entitlement to an interest free construction bond among districts in california although the lottery is exogenous additional non lottery allocation complicates identification this paper develops an empirical model based on sample selection methods in order to create a counterfactual state in which additional non lottery allocation would not have existed i find that receiving the interest free construction bond increases school capital expenditure and housing values at the district level i view the increase in housing values as the capitalization of school capital investments i find little evidence for the effect of the interest free construction bond on household sorting and student s academic outcomes

the effect of legalizing retail marijuana on housing values evidence from colorado does legalizing retail marijuana generate more benefits than costs this paper provides a first step toward addressing that question by measuring the benefits and costs that are capitalized into housing values we exploit the time series and cross sectional variations in the adoption of colorado s municipality retail marijuana laws rmls and examine the effect on housing values with a difference in differences strategy our estimates show that the legalization leads to an average 6 increase in housing values indicating that the capitalized benefits outweigh the costs in addition we find suggestive evidence that this relatively large housing value appreciation is likely due to rmls inducing strong housing demand while having no discernible effect on housing supply finally we show that the effect of rmls is heterogeneous across locations and property types jel k20 r28

monopolistic competition and the q theory of investment abstract in this paper we analyse the implications for q models of investment of replacing the assumption of perfect competition in the output market with the assumption of monopolistic competition the structural investment equation that can be derived in this case has a richer dynamic structure than the conventional one and it contains in addition to present and future q output as an explanatory variable in the applied section we discuss the extent to which monopolistic competition helps in providing a remedy for the empirical weaknesses of q models the estimates are obtained using aggregate data for u k industrial and commercial companies for the period 1951 1979

capitalising the value of free schools the impact of supply characteristics and uncertainty there has been a growing literature in both the us for example haurin and brasington 1996 and black 1999 and the uk for example gibbons machin 2003 that estimates the way in which school quality is capitalised into house prices cheshire and sheppard 1995 and 1999 estimated hedonic models in which the quality of the secondary school to which a household was assigned was a significant variable which provided evidence that secondary school quality was being capitalised into the price of houses in contrast gibbons and machin concluded that primary schools were more significant each of these analyses is predicated on the assumption that the value of local schools should be reflected in the value of houses we argue here that this is rather too simple we should expect variation in the capitalised price of a given school quality at either primary or secondary level according to the elasticity of supply of school quality in the local market the certainty with which that quality can be expected to be maintained over time and the suitability of the dwelling to accommodate children these factors will vary systematically between and perhaps within cities this paper explores the sources and the impact of such variations as well as the impact of model specification the results provide new evidence on the complex and subtle ways in which housing markets capitalise the value of local public goods such as school quality and perhaps most importantly suggest that this is highly non linear houses in the catchment areas of only the best state schools command substantial premiums but such capitalised values can be very substantial indeed

suburbanization demographic change and the consequences for school finance abstract the existing literature on the relationship between the share of elderly in a community and the support for local public education has led to mixed results to date one potential reason behind this is that the share of elderly in a community is endogenous and it is very difficult to disentangle the effects of individuals aging in place from that of dynamic tiebout sorting the point of this paper is to carefully document the degree to which aging in place has occurred in the american suburbs and to estimate the degree to which it has influenced school finance once the initial settlers of these suburbs were no longer the parents of school aged children we hand match data from the 1950 and 1960 censuses of population and housing to more recent data to link postwar suburban development to later school finance using a novel method for identifying the causal effects of aging in place we find that the percentage of elderly adults in a school district is negatively related to the level of support for public schooling and that this is particularly true for school districts in metropolitan areas where the school aged population is more heavily nonwhite relative to the elderly population

higher taxes more evasion evidence from border differentials in tv license fees this paper studies the evasion of tv license fees in austria we exploit border differentials to identify the effect of fees on evasion comparing municipalities at the low and high fee side of state borders reveals that higher fees trigger significantly more evasion our preferred estimator indicates that a one percent increase in fees raises the evasion rate by 0 3 percentage points the positive effect of fees on evasion is confirmed in different parametric and non parametric approaches and survives several robustness checks