Self-Assessment of Takings Compensation: An Empirical Study
Journal of Law, Economics, and Organization, Vol. 28, 2012
28 Pages Posted: 3 Mar 2008 Last revised: 16 Oct 2010
Date Written: May 17, 2010
Several scholars have proposed using property owners' periodic assessments of properties' economic value as takings compensation, replacing the current U.S. regime which uses ex post, ad hoc governmental assessments of properties' market value. No empirical study has yet been done to examine whether the proposed ex ante self-assessment method produces accurate takings compensation. This Article fills the empirical gap by analyzing data from Taiwan's 1954-1977 regime, which is similar to the proposed scholarly models.
I find that most landowners' ex ante self-assessments are not only below their economic value, but also below the market value. The monetary incentives to report lower self-assessments in order to reduce property taxes appear to outweigh the risk that low self-assessments will result in under-compensation. The ex ante self-assessment method, if implemented in the U.S., will likely produce inaccurate property value assessments as well.
Keywords: self-assessment, takings compensation, ex ante, ex post, property value
JEL Classification: K11, K23, M41, M43, M44, M49
Suggested Citation: Suggested Citation
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By Steven Eagle