Andrew Hanson

The Incidence of Tobacco Taxation: Evidence from Geographic Micro-Level Data

This paper uses a recent increase in Wisconsin’s tobacco tax as a natural experiment to measure the economic incidence of tobacco taxation, using micro-level data on cigarette prices from retail locations in Wisconsin and states that share its border. We find that Wisconsin’s

Do Location-Based Tax Incentives Attract New Business Establishments?

1 tobacco tax increase was over-shifted to consumers; they pay the entire amount of the tax as well as a premium of between 8–17 cents per pack of cigarettes. We also use geo-coded data to test if the incidence of the tobacco tax is different for locations near the border of states with different tobacco taxation.

The Effect of Location-Based Tax Incentives on Establishment Location and Employment across Industry Sectors

This paper examines how offering tax incentives in a local area affects the entry of new business establishments. We use the federal Empowerment Zone (EZ) program as a natural experiment to test this relationship. Using instrumental variables estimation, we find that the EZ wage tax credit is responsible for attracting about 2.2 new establishments per 1,000 existing establishments, or a total of 20 new establishments in EZ areas. New establishment growth is strongest in the retail (about 40 new establishments) and service (about five new establishments) sectors, and offset by declines or slower growth in other industries.

Field Experiment Tests for Discrimination against Hispanics in the U.S. Rental Housing Market

This article examines the potential for location-based employment tax incentives to have a differential effect on establishment location and employment across industry sectors. The authors model the differential effect of the location-based federal Empowerment Zone (EZ) wage tax credit on equilibrium labor and total cost savings across industry sectors. The model guides the empirical work, as the authors test the effect of the program across industry sectors. The empirical analysis shows that location-based tax incentives have a positive effect on firm location in some of the industries their model predicts and a negative effect in industries that could be crowded out.

The Incidence of the Mortgage Interest Deduction: Evidence from the Market for Home Purchase Loans

This article tests for discrimination against Hispanics in the U.S. rental housing market using e-mail correspondence with landlords advertising units online. We divide Hispanics into two groups: those that appear assimilated into American culture and recent immigrants. We find little difference in the treatment of assimilated Hispanics and whites; however, Hispanics we portray as recent immigrants receive less favorable treatment with margins of net discrimination as large as 6.89% of landlords. We also find discrimination varies significantly at the region level and by the ethnic composition of neighborhoods.

Housing Market Distortions and the Mortgage Interest Deduction

This article examines the incidence of the largest housing-related subsidy in the federal budget, the home mortgage interest deduction (MID). The author uses the difference in interest rates for loans made around the MID limit to identify the incidence of the subsidy. Using data on individual mortgages originated in 2004, the author estimates that for every

Are Houses Too Big or In the Wrong Place? Tax Benefits to Housing and Inefficiencies in Location and Consumption

1,000 borrowed without the MID, the interest rate on the entire loan decreases by between 3.3 and 4.4 percent. Results suggest that lenders capture between 9 and 17 percent of the subsidy created by the home MID through higher mortgage interest rates.

The Impact of Early Commitment on Games Played: Evidence from College Football Recruiting

Housing market distortions from the mortgage interest deduction (MID) typically focus on a single choice measure such as home size or self-reported amount of debt on a new mortgage. We estimate the amount of mortgage interest deducted on federal tax returns to capture the full range of housing market distortions from the MID. Our primary results show that for every one percentage point increase in the tax rate that applies to deductibility, the amount of mortgage interest deducted increases by US

Utilization of Employment Tax Credits: An Analysis of the Empowerment Zone Wage Tax Credit

303 to US

Tax Reform and Incentives to Encourage Owner-Occupied Housing: Analysis of the President's Tax Reform Panel Recommendation to Convert the Mortgage Interest Deduction to a Tax Credit

590. Empirical estimates imply elasticities of mortgage interest deducted with respect to the after-tax cost of housing between −0.78 and −1.62, and deadweight loss estimates ranging from 16 to 36 percent of MID tax expenditure.