Abstract: This dissertation explores the interaction of tax and land use policies in the U.S. The first essay, Exclusionary Fiscal Zoning and Residential Housing Density, explores the hypotheses that local generation of tax revenue encourages local governments to enact zoning policies that reduce the efficiency of land markets. The theoretical model predicts that heavy reliance on local income tax revenue by local governments will encourage strict large-lot fiscal zoning restrictions. Empirical results support the theoretical hypothesis for tax districts in Delaware County, Ohio. The second essay, The Effect of Use-Value Assessment on Land Use Change in Rural and Suburban Areas, explores the effects of preferential property tax treatment for agricultural uses. A survival model is employed to explain the timing of farmland conversion to urban uses. Preferential tax assessment is found to be effective at slowing farmland conversion in a rural Ohio township, but ineffective in a suburban township closer to Columbus, Ohio. The third essay, The Capitalization of Property Taxes into the Prices of High and Low-Value Homes, employs a hedonic model to test the impact of local property taxes and large-lot zoning on housing values. The empirical results show mixed evidence to support the hypothesis that property taxes have a more negative impact on high-value homes as compared to low-value homes. The results also show a price premium on homes with small lots. This premium may be explained by a zoning induced shortage of small-lot homes.
This text brings together essays by scholars connecting the property tax with land use. They explore the idea that the property tax is used as a partial substitute for land use regulation and other policies designed to affect how land is utilized. Like many economists, the contributors see some type of property taxation as the more efficient means of helping to shape land use. Some of the essays analyze a conventional property tax, while others consider radically different systems of property taxation. context of a dynamic model of real estate markets. The remaining papers examine how various tax mechanisms and non-tax alternatives to regulating and determining land use, such as zoning and private neighbourhood associations, complement or substitute for one another. Urban planners and economists interested in local public finance should find this a useful study.
Land use is one of the leading factors that cause environmental degradation, such as water pollution, open space contraction and habitat loss. This dissertation consists of three essays. First paper investigates the relationship between land use and water pollution. Combining land use choice model and water pollution data, I simulate the effects of the policies that changes returns to land uses such as afforestation payments in five watersheds in Japan. From this simulation, I derive abatement cost of chemical oxygen demand, total nitrogen, and total phosphorous and I reveal that afforestation payment is best policy for most of pollutants and regions but in some regions it increases chemical oxygen demand. The cost data is then compared with abatement cost from upgrading and construction of sewage treatment plants to compare relative efficiency and show that combining both policy is sometimes more efficient that single policy. The second essay focuses on one watershed in Japan and I analyze the effect of the subsidy that promotes eco-friendly agriculture using fixed effect panel. Using budget as abatement cost, policy effect is estimated and compare it with land use subsidy and sewage treatment construction and upgrade cost. For my study area, afforestation payment is most cost effective while investing sewage treatment plants are least cost effective but the result depends on existing sewage treatment plants and regional characteristic. The third model focuses on land use and open space. Even though previous study (Bento et al. 2006) revealed that a tax and an urban growth boundary is equivalent in terms of efficiency. When I relax assumption by adding uncertainty and heterogeneity in soil quality, I show counterexamples of equivalence of two policies.
This thesis comprises three essays on the role of land use in economic development over the long run. As is natural for many theses, "development" here is defined in a range of ways. The first essay considers the long-run effects of historical land concentration on agricultural investment and productivity in the frontier United States. The second essay considers how disruptions to agriculture in the US South, in the form of the boll weevil pest, changed the political economy of the Jim Crow South. The final essay considers the long run in the future, using agronomic microdata to assess the impact of climate change on agricultural productivity. The first chapter provides new evidence on the old question of how concentrating land into the hands of large landlords affects economic development. Despite their popularization as bastions of pioneer equality, America’s frontier regions often exhibited highly concentrated patterns of land ownership. A patchwork of policies opened some areas to large-scale farming by absentee landlords but reserved others for settlement by small farmers. This paper studies the impacts of land concentration on the long-run development of the frontier United States using quasi-random variation in these allocation procedures. I collect a large database of modern property tax valuations and show that historical land concentration had persistent effects over a span of 150 years: lowering investment by 23%, overall property value by 4.4%, and population by 8%. I argue that landlords' use of sharecropping raised the costs of investment, a static inefficiency that persisted due to land market frictions. I find little evidence for other explanations, including elite capture of political systems. I use my empirical estimates to evaluate counterfactual policies, applying recent advances in combinatorial optimization to show that an optimal property rights allocation would have increased my sample’s agricultural land values by $28 billion (4.8%) in 2017. The second chapter, joint with James Feigenbaum and Soumyajit Mazumder, studies the role of Hirschman’s threat of "exit" in the Great Migration in the Jim Crow South. How do coercive societies respond to negative economic shocks? Since before the nation's founding, cotton cultivation formed the politics and institutions in the South, including the development of slavery, the lack of democratic institutions, and intergroup relations between whites and blacks. We leverage the natural experiment generated by the boll weevil infestation from 1892-1922, which disrupted cotton production in the region. Panel difference-in-differences results provide evidence that Southern society became less violent and repressive in response to this shock with fewer lynchings and less Confederate monument construction. Cross-sectional results leveraging spatial variation in the infestation and historical cotton specialization show that affected counties had less KKK activity, higher non-white voter registration, and were less likely to experience contentious politics in the form of protests during the 1960s. To assess mechanisms, we show that the reductions in coercion were responses to African American out-migration. Even in a context of antidemocratic institutions, ordinary people can retain political power through the ability to "vote with their feet." The third chapter, joint with Arnaud Costinot and Dave Donaldson, looks at the long run effects of climate change on agricultural productivity and land use. A large agronomic literature models the implications of climate change for a variety of crops and locations around the world. The goal of the present paper is to quantify the macro-level consequences of these micro-level shocks. Using an extremely rich micro-level dataset that contains information about the productivity--both before and after climate change--of each of 10 crops for each of 1.7 million fields covering the surface of the Earth, we find that the impact of climate change on these agricultural markets would amount to a 0.26% reduction in global GDP when trade and production patterns are allowed to adjust.
The United States is a highly urbanized nation. Today, with a growing number of people living in cities, a better understanding of how changes within urban areas impact the well-being of residents has important implications for policymakers and communities. The urban spatial structure of these cities is continually evolving, and in different ways across cities. This changing urban environment has substantial impacts on health and well-being. This dissertation takes a comprehensive view of social welfare from a policy perspective, including questions related to environmental degradation and public health, in order to scrutinize how urban gradients and urban spatial structures yield different consequences and affect residents in various ways. My first chapter explores how changing urbanization patterns in the United States influences air quality outcomes. Specifically, I seek to answer whether more compact forms of residential development result in better air quality relative to more sprawling patterns. I use spatially explicit data on air pollution and residential development, including over 6 million observations on new housing from tax assessment data, across large metropolitan areas to reveal a causal link between urban sprawl and air pollution from vehicle traffic. I find that compact cities experience a larger reduction in nitrogen dioxide and ozone compared with sprawling cities. In my second chapter, I explore the health benefits of urban green space. In order to better understand the impacts of urban green space on health outcomes, I examine the effects of city park area on mortality rates from cardiovascular disease among the elderly. I combine city park data with data on mortality rates, behavioral risk factors, and socioeconomic characteristics to conduct comparative case studies utilizing a synthetic control method. I select cities with significantly increased and reduced park area and examine how health benefits vary compared to cities where park area has not expanded. My results indicate that cities with increased park area experience a larger reduction in cardiovascular mortality for the elderly compared to their synthetic counterparts, although cities with reduced park area fail to show that there is a negative causal link between the reduction of parkland and cardiovascular mortality. In my third chapter, I study spatial variations in housing market resilience within and across U.S. metropolitan areas. I investigate how residential housing markets respond to the economic boom and bust periods before, during and after the Great Recession across urban, suburban, and exurban areas. Using over 15 million observations of housing sales across the largest 51 metropolitan areas of over one million population, this essay focuses on variations across census tracts to trace the path of housing prices at the neighborhood level. The results indicate that, relative to suburban and exurban areas, housing markets in urban areas were harder hit during the recession but recovered faster after the market crash. Urban and exurban housing markets within cities with high geographical restrictions fell to a similar extent during the bust. I also find that the West region was particularly volatile during this sample period.
This dissertation is a collection of three essays on applied microeconomics. The first essay examines how local control over property tax revenues generated from large plants affects local jurisdictions' willingness to host such projects. We first demonstrate that property tax payments from plant openings lead to significant increases in local school budgets and that this change is valued by local residents as measured through home prices. We next show that as local jurisdictions become less able to raise and retain property tax revenue from large plants, the number of these plants within the jurisdiction falls significantly relative to nearby jurisdictions that did not experience such a change. These results suggest that increased property tax revenues are an important benefit of large plants and as a result, policies that affect local control over property taxation can have major unintended consequences for non-residential land use and local environmental quality. In the second essay, I examine the effectiveness and equity of automatic driver's license suspensions for nonpayment of criminal fines, a policy that is in place in more than 40 states and that affects millions of drivers annually. Using a unique natural experiment in Washington that first eliminated and then reinstated driver's license suspensions for traffic offense punishment noncompliance. I find that mandating suspensions caused large increases in compliance, fine-repayment, and total punishment with greater effects for lower-income individuals. I further show suggestive evidence that the policy causes declines in traffic accidents among low-income drivers suggesting that such laws are an effective, but highly regressive way to improve traffic safety. In the third essay, I examine the effects of a major environmental litigation initiative, which led one-third of the US coal-fired power plant fleet to come under a consent decree. I show that legal settlements arising out of this initiative caused large decreases in plant pollution emissions, which further led to meaningful improvements in local air quality and decreases in local cardiovascular and respiratory mortality rates. I conclude by showing suggestive evidence that in regulated electricity markets average electricity retail price and utility revenues increased following a settlement suggesting that a large proportion of the overall costs were borne by ratepayers.
