Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214234
Authors: 
Dörr, Luisa
Gaebler, Stefanie
Year of Publication: 
2020
Series/Report no.: 
ifo Working Paper 321
Abstract: 
We examine how highway accessibility influences tax policy. We exploit the stagewise expansion of the "Baltic Sea highway" in the East German state Mecklenburg-Western Pomerania as the largest contiguous highway construction project in Germany since 1945. For non-agglomeration municipalities that lie on a convenient route between two larger cities the access and opening year are close to random. Results from difference-in-differences estimations and an event study approach show that highway access influences local tax setting in municipalities within 5 to 10 km road distance. Improved accessibility increases property tax factors persistently by roughly 6 percentage points. Our effects are driven by peripheral municipalities, while we do not find an influence on core municipalities. Additionally, improved accessibility gives rise to a shift of population and economic activity from the periphery to the core.
Subjects: 
highway
infrastructure
accessibility
tax factors
municipalities
localgovernments
JEL: 
H54
H71
O18
Document Type: 
Working Paper

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