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Land Value Taxation and New Housing Development in Pittsburgh
Author(s) -
BOURASSA STEVEN C.
Publication year - 1987
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.1987.tb00087.x
Subject(s) - incentive , market liquidity , economics , value (mathematics) , econometric model , variable (mathematics) , instrumental variable , microeconomics , public economics , econometrics , monetary economics , statistics , mathematical analysis , mathematics
Incentive and liquidity effects of Pittsburgh's land value tax system are hypothesized to encourage new housing development. To test this hypothesis, an econometric model is estimated using building permit data for the dependent variable and tax rates and other determinants of new housing demand and supply for the independent variables. For the case of new housing, it is shown that the incentive effect is significant but the liquidity effect is not. The incentive effect is found to encourage increases in the number of new units constructed in Pittsburgh rather than increases in the average cost of new units.