RT Journal Article
SR Electronic
T1 An Experimental Economics Investigation of the Land Value Tax: Efficiency, Acceptability, and Positional Goods
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 475
OP 495
DO 10.3368/le.94.4.475
VO 94
IS 4
A1 Duke, Joshua M.
A1 Gao, TianHang
YR 2018
UL http://le.uwpress.org/content/94/4/475.abstract
AB 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)