Buying Their Votes? A Study of Local Tax‐Price Discrimination

19 Pages Posted: 14 May 2015

See all articles by Randall Reback

Randall Reback

Columbia University, Barnard College - Department of Economics

Date Written: July 2015

Abstract

A population’s demographic composition may affect political support for various public services. This article examines whether the aging-in-place of local residents decreases financial support for public schools in the United States. I expand on previous empirical work by examining whether tax-price reductions offered to elderly homeowners moderate their effect on local school revenues. The results reveal that an aging population structure substantially decreases school revenues, unless elderly homeowners receive state-financed reductions in their local tax-prices. Sizable differences hold even when comparing school districts located near each other but on opposite sides of state borders. Given the imminent aging of the population structure in the United States and many other developed countries, governments’ targeted tax reduction policies could have important effects on equilibrium school revenues.

Suggested Citation

Reback, Randall L., Buying Their Votes? A Study of Local Tax‐Price Discrimination (July 2015). Economic Inquiry, Vol. 53, Issue 3, pp. 1451-1469, 2015, Available at SSRN: https://ssrn.com/abstract=2605228 or http://dx.doi.org/10.1111/ecin.12174

Randall L. Reback (Contact Author)

Columbia University, Barnard College - Department of Economics ( email )

3009 Broadway
New York, NY 10027
United States

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