American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Proposition 13: An Equilibrium Analysis
American Economic Journal: Macroeconomics
vol. 10,
no. 2, April 2018
(pp. 24–51)
Abstract
There are many federal, state, and local laws that distort housing decisions and prices. However, it is often difficult to tease out the quantitative impact of such policies. In this paper, we examine the implications of one of the most significant tax changes initiated by voters in the United States on house prices, housing turnover, and household welfare. In 1978 California passed Proposition 13, which lowered property tax rates and restricted future property tax increases. We find that the introduction of Proposition 13 leads to a 15 percent increase in house prices and a 3.3 percent decrease in the moving rates. The elimination of Proposition 13, however, leads to modest changes in house prices and mobility but sizable welfare gains.Citation
İmrohoroğlu, Ayşe, Kyle Matoba, and Şelale Tüzel. 2018. "Proposition 13: An Equilibrium Analysis." American Economic Journal: Macroeconomics, 10 (2): 24–51. DOI: 10.1257/mac.20160327Additional Materials
JEL Classification
- E13 General Aggregative Models: Neoclassical
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- H71 State and Local Taxation, Subsidies, and Revenue
- R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
- R31 Housing Supply and Markets
There are no comments for this article.
Login to Comment