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Title: Do Location-based Tax Incentives Improve Quality of Life and Quality of Business Environment?

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: We examine how location-based tax incentives affect quality of life and business environment through changes in property values and equilibrium wages. Using the federal Empowerment Zone program, which offers tax incentives to firms, as a natural experiment we determine whether this form of economic redevelopment policy improves the welfare of the citizens and attractiveness to firms. To the best of our knowledge this paper is one of the first to analyze a tax policy that affects only a subset of a metropolitan area by demonstrating that quality of life methodologies can be applied using small geographically-aggregated data, such as census block groups, opening new possibilities to the literature. We find that the tax incentives offered by the Empowerment Zone program notably enhances the quality of business environment for firms in the area while modestly improving the quality of life for the individuals living in the area.

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Authors: Rohlin, Shawn; Reynolds, Lockwood

Publisher: Kent State University

Data Collections: IPUMS USA

Topics: Housing and Segregation, Other

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