An Analysis of the Time to Adoption of Local Sales Taxes: A Duration Model Approach

Abstract

The timing of the decision of local governments to adopt a local sales tax is explored in a duration model with time-varying covariates. Our framework suggests a set of factors associated with the decision to adopt a local sales tax and we find empirical support for these factors. We also consider whether the adoption by one jurisdiction depends on the adoption by neighboring jurisdictions and find empirical support for interdependency of behavior.