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Zoning and fiscal interdependencies

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Abstract

Although there are strong theoretical reasons to regard optimal zoning and fiscal policies as simultaneous decisions, most empirical studies have focused on one type of decision or the other. Even fewer attempts have been made to study interdependencies between competing towns in their selection of zoning and fiscal policies. If these interdependencies are prevalent, autonomous local governments may pursue zoning, taxing, and spending policies that are locally rational but socially inefficient. In this study, an optimization model of the local economy is used to illustrate the nature of these interdependencies and to specify an appropriate empirical test. Data from 164 Connecticut townships are used to estimate the empirical model.

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Authors and Affiliations

  1. Department of Economics, Providence College, 02918, Providence, RI, USA

    Maryjane Lenon

  2. Department of Economics, U-63, University of Connecticut, 06269, Storrs, CT, USA

    Sajal K. Chattopadhyay

  3. Department of Economics, U-63, University of Connecticut, 06269, Storrs, CT, USA

    Dennis R. Heffley

Authors
  1. Maryjane Lenon
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  2. Sajal K. Chattopadhyay
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  3. Dennis R. Heffley
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Lenon, M., Chattopadhyay, S.K. & Heffley, D.R. Zoning and fiscal interdependencies. J Real Estate Finan Econ 12, 221–234 (1996). https://doi.org/10.1007/BF00132269

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