Edoardo Di Porto
;
Federico Revelli

tax-limited reaction functions (replication data)

This paper models for the first time a spatial process in local tax policies in the presence of centrally imposed fiscal limitations. Focusing on the frequently encountered case of a tax rate cap, we evaluate three empirical approaches to the analysis of spatially dependent limited tax policies: (i) a Bayesian spatial approach for censored dependent variables; (ii) a Tobit corner solution model augmented with a spatial lag; (iii) a spatial discrete hazard model. The evidence arising from an investigation of severely state-constrained local vehicle taxes in Italy suggests that ignoring tax limitations can lead to substantial underestimation of inter-jurisdictional fiscal interaction.

Data and Resources

Suggested Citation

Porto, Edoardo Di; Revelli, Federico (2013): TAX-LIMITED REACTION FUNCTIONS (replication data). Version: 1. Journal of Applied Econometrics. Dataset. http://dx.doi.org/10.15456/jae.2022320.0732597491