Central Command, Local Hazard and the Race to the Top

Revelli, Federico; Di Porto, Edoardo

doi:10.2139/ssrn.1486022

Central Command, Local Hazard and the Race to the Top

U. of Torino Department of Economics Research Paper No. 9/2009-GE

33 Pages Posted: 10 Oct 2009

See all articles by Federico Revelli

Edoardo Di Porto

University of Naples Federico II - CSEF - Center for Studies in Economics and Finance

Date Written: September 28, 2009

Abstract

This paper explores for the first time the consequences of centrally imposed local tax limitations on the modelling and estimation of spatial auto-correlation in local fiscal policies, and compares three spatial interaction estimators: a) the conventional maximum likelihood estimator that ignores censoring; b) a spatial Tobit estimator; c) a discrete hazard estimator. Implementation of the above empirical approaches on the case of local vehicle taxation in Italy provides a reasonably coherent picture in terms of the direction and size of the spatial interaction process, and oﬀers a plausible spatial interpretation of the race to the top in provincial vehicle taxes.

Keywords: vehicle taxation, spatial auto-correlation, censored data

JEL Classification: C23, C25, H72

Suggested Citation: Suggested Citation

Revelli, Federico and Di Porto, Edoardo, Central Command, Local Hazard and the Race to the Top (September 28, 2009). U. of Torino Department of Economics Research Paper No. 9/2009-GE, Available at SSRN: https://ssrn.com/abstract=1486022 or http://dx.doi.org/10.2139/ssrn.1486022