Abstract

ABSTRACT:

This research offers the first economic experiment investigating the land tax, where landowners invest under different property tax regimes. A voting treatment assesses the relative acceptability of land value taxation. Results show a land tax produced greater overall welfare in only 37.5% of the experiment sessions. Systematic overinvestment arises from the positional-good characteristic of residential land investment, but this effect vanishes when the positional-good indicator is removed. The experiments show that the participants unexpectedly voted in favor of the land tax, suggesting that the efficiency and acceptability of the land tax may be more complex than in nonbehavioral economics modeling. (JEL H21, H71)

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Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 475-495
Launched on MUSE
2018-10-15
Open Access
No
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