An Experiment Involving Property Tax Assessment Quality

51 Pages Posted: 13 Oct 2020

See all articles by Jason Delaney

Jason Delaney

Georgia State University

David L. Sjoquist

Georgia State University

Sally Wallace

Georgia State University - Department of Economics; University of Pretoria

Date Written: April 2020

Abstract

We conduct a laboratory experiment to explore the willingness to pay to improve the accuracy of property assessment and three related issues regarding attitudes toward these assessments and taxes. First, we explore individual willingness to pay to improve property assessment accuracy; a more accurate assessment is one with a smaller variance of potential assessments, i.e., a lower risk of an unknown property tax bill. We compare that to what individuals are willing to pay for a reduction in the variance of an equivalent private cost. Second, we explore the extent to which the willingness to pay to improve the accuracy of property assessments depends on whether the risk for other property owners also decreases. We find that subjects do not appear to distinguish between public and private sources of risk. They are responsive to the price of the improvement of property tax assessment accuracy. Finally, we use this result to estimate demand for reduced risk and find that subjects were not willing to pay to reduce the assessment variance to a level consistent with best practices in property tax assessment.

Keywords: Property Tax Assessment, Experiment

JEL Classification: H7, C91

Suggested Citation

Delaney, Jason and Sjoquist, David L. and Wallace, Sally, An Experiment Involving Property Tax Assessment Quality (April 2020). Andrew Young School of Policy Studies Research Paper Series No. 20-02, Available at SSRN: https://ssrn.com/abstract=3707760

Jason Delaney

Georgia State University

35 Broad Street
Atlanta, GA 30303-3083
United States

David L. Sjoquist (Contact Author)

Georgia State University ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-413-0246 (Phone)

HOME PAGE: http://frp.aysps.gsu.edu/sjoquist/index.html

Sally Wallace

Georgia State University - Department of Economics ( email )

Department of Economics
35 Broad Street, 6th Floor
Atlanta, GA 30303-3083
United States
(404) 413-0046 (Phone)

University of Pretoria ( email )

Physical Address Economic and Management Sciences
Pretoria, Gauteng 0002
South Africa

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