The economics of Proposition 13

In 1978 California passed Proposition 13, which lowered property tax rates and restricted future property tax increases. We find that the introduction of Proposition 13 leads to a 15 percent increase in house prices and a 3.3 percent decrease in the moving rates. The elimination of Proposition 13, however, leads to modest changes in house prices and mobility but sizable welfare gains.

Here is the paper by Ayse İmrohoroğlu, Kyle Matoba and Şelale Tüzel.  Here are ungated copies.


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