The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Property Taxation

  • George R. Zodrow
Reference work entry


Property taxation of both residential and non-residential land and structures is the most common form of wealth taxation worldwide, and is often the revenue instrument of choice for local governments. Despite widespread use of the property tax and a voluminous academic literature examining the tax, its incidence and economic effects are still contentious issues, with the debate centring around whether the capital portion of the tax should be viewed as distorting the allocation of capital or as an efficient benefit tax or user charge for local public services.


Assessment process Benefit tax Capital tax Capitalization Efficient allocation Equity Excise tax Fiscal differential Fiscal equalization George, H. General equilibrium Harberger, A.C. Hamilton, B.W. Head tax Housing market Interurisdictional competition Land tax Land use zoning Local government Local public finance Mieszkowski, P. Partial equilibrium Profits tax Progressive and regressive taxation Property taxation Property tax limitations Returns to capital Tax incidence Tiebout, C. Tiebout model Underprovision of public services User fees 

JEL Classifications

H2 H3 H4 H7 
This is a preview of subscription content, log in to check access.


  1. Anderson, J.E., ed. 1994. Fiscal equalization for state and local government finance. Westport: Praeger.Google Scholar
  2. Bradford, D.F. 1978. Factor prices may be constant but factor returns are not. Economics Letters 1: 199–203.CrossRefGoogle Scholar
  3. Brown, H.G. 1924. The economics of taxation. New York: Holt.Google Scholar
  4. Carroll, R., and J. Yinger. 1994. Is the property tax a benefit tax? The case of rental housing. National Tax Journal 47: 295–316.Google Scholar
  5. Fischel, W.A. 1992. Property taxation and the Tiebout model: Evidence for the benefit view from voting and zoning. Journal of Economic Literature 30: 171–177.Google Scholar
  6. Fischel, W.A. 2001a. Municipal corporations, homeowners, and the benefit view of the property tax. In Property taxation and local government finance, ed. W.E. Oates. Cambridge, MA: Lincoln Institute of Land Policy.Google Scholar
  7. Fischel, W.A. 2001b. Homevoters, municipal corporate governance, and the benefit view of the property tax. National Tax Journal 54: 157–173.CrossRefGoogle Scholar
  8. George, H. 1879. Progress and poverty. New York: Dutton.Google Scholar
  9. Hamilton, B.W. 1975. Zoning and property taxation in a system of local governments. Urban Studies 12: 205–211.CrossRefGoogle Scholar
  10. Hamilton, B.W. 1976. Capitalization of intrajurisdictional differences in local tax prices. American Economic Review 66: 743–753.Google Scholar
  11. Harberger, A.C. 1962. The incidence of the corporate income tax. Journal of Political Economy 70: 215–240.CrossRefGoogle Scholar
  12. Ladd, H.F. 1998. Local government tax and land use policies in the United States. Northampton: Edward Elgar Publishing.Google Scholar
  13. Mieszkowski, P. 1972. The property tax: An excise tax or a profits tax? Journal of Public Economics 1: 73–96.CrossRefGoogle Scholar
  14. Mieszkowski, P., and G.R. Zodrow. 1989. Taxation and the Tiebout model: The differential effects of head taxes, taxes on land rents, and property taxes. Journal of Economic Literature 27: 1098–1146.Google Scholar
  15. Netzer, D. 1966. Economics of the property tax. Washington, DC: Brookings Institution Press.Google Scholar
  16. Netzer, D. 2001. Local property taxation in theory and practice: Some reflections. In Property taxation and local government finance, ed. W.E. Oates. Cambridge, MA: Lincoln Institute of Land Policy.Google Scholar
  17. Oates, W.E. 1969. The effects of property taxes and local public spending on property values: An empirical study of tax capitalization and the Tiebout hypothesis. Journal of Political Economy 77: 957–961.CrossRefGoogle Scholar
  18. Ross, S., and J. Yinger. 2000. Sorting and voting: A review of the literature on urban public finance. In Handbook of regional and urban economics, ed. P. Cheshire and E.S. Mills, vol. 3. Amsterdam: North-Holland.Google Scholar
  19. Rubinfeld, D.L. 1987. The economics of the local public sector. In Handbook of public economics, ed. A.J. Auerbach and M.S. Feldstein. Amsterdam: North-Holland.Google Scholar
  20. Simon, H.A. 1943. The incidence of a tax on urban real property. Quarterly Journal of Economics 59: 398–420.CrossRefGoogle Scholar
  21. Tiebout, C.M. 1956. A pure theory of local expenditures. Journal of Political Economy 64: 416–424.CrossRefGoogle Scholar
  22. Wassmer, R.W. 1993. Property taxation, property base, and property value: An empirical test of the ‘new view’. National Tax Journal 46: 135–160.Google Scholar
  23. Wildasin, D.E. 1986. Urban public finance. New York: Harwood.Google Scholar
  24. Wilson, J.D. 1986. A theory of inter-regional tax competition. Journal of Urban Economics 19: 296–315.CrossRefGoogle Scholar
  25. Yinger, J., H.S. Bloom, A. Boersch-Supan, and H.F. Ladd. 1988. Property taxes and house values: The theory and estimation of intrajurisdictional property tax capitalization. San Diego: Academic Press.Google Scholar
  26. Zodrow, G.R. 2001a. Reflections on the new view and the benefit view of the property tax. In Property taxation and local government finance, ed. W.E. Oates. Cambridge, MA: Lincoln Institute of Land Policy.Google Scholar
  27. Zodrow, G.R. 2001b. The property tax as a capital tax: A room with three views. National Tax Journal 54: 139–156.CrossRefGoogle Scholar
  28. Zodrow, G.R. 2006. The property tax incidence debate and the mix of state and local finance of local public expenditures, Working paper. Rice University.Google Scholar
  29. Zodrow, G.R., and P. Mieszkowski. 1983. The incidence of the property tax: The benefit view vs. the new view. In Local provision of public services: The Tiebout model after twenty-five years, ed. G.R. Zodrow. New York: Academic Press.Google Scholar
  30. Zodrow, G.R., and P. Mieszkowski. 1986a. The new view of the property tax: A reformulation. Regional Science and Urban Economics 16: 309–327.CrossRefGoogle Scholar
  31. Zodrow, G.R., and P. Mieszkowski. 1986b. Pigou, Tiebout, property taxation and the under-provision of local public goods. Journal of Urban Economics 19: 356–370.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • George R. Zodrow
    • 1
  1. 1.