Calvin Blackwell

Only for my own neighborhood?: Preferences and voluntary provision of local and global public goods

While public goods are defined as non-rival and non-excludable, there are degrees of excludability. This paper reports on the results of a series of experiments designed to investigate the role of preferences on individual willingness to contribute to the provision of a group (excludable) versus a global (non-excludable) public good. The results of this experiment show that when the average per capita return (APCR) to society of the global public good exceeds the APCR to society of the group public good, individuals contribute more to the global good but do not reduce their contributions to the group public good.

Audit Selection and Firm Compliance With a Broad-Based Sales Tax

This paper examines the process by which firms are selected for a sales tax audit and the determinants of subsequent firm compliance behavior, focusing upon the Gross Receipts Tax in New Mexico. A two–stage selection model is used to estimate the State’s audit selection rule and, conditional upon audit selection, the firm’s compliance choice. The first–stage estimation results indicate that auditors select returns based upon a systematic, even if informal, audit rule. The second–stage results show that firms that exhibit greater variation in deductions, provide services, miss filing deadlines, and have an out–of–state mailing address have a lower compliance rate.

Expenditures of Accommodations Tax Revenue: A South Carolina Study

The collection of accommodations taxes, generally paid by nonresident visitors, has become a well-accepted means of raising tax revenues in tourism communities. This article looks at small communities and counties across the State of South Carolina to determine categories of use that may provide local governments their best return on their expenditure of these funds. The findings, decidedly exploratory in nature, suggest that the use of accommodation tax funds for the promotion of the arts, cultural events, and other tourism-related events is a successful strategy, enabling tourism growth (as measured by growth in the accommodations sector) while hopefully fueling a virtuous cycle that yields still greater tourism dollars for the community.

Local Government Compliance with Earmarked Tax Regulation

This article investigates local governments’ spending of accommodations tax revenues in the state of South Carolina. Although these revenues are partially earmarked for tourism promotion, results show that local governments engage in illegal fiscal substitution. This fiscal substitution can be explained by the local governments financial flexibility and the proportion of accommodations taxes relative to its overall budget.

Is There a Bias Toward Contributing to Local Public Goods? Cultural Effects

A series of experiments was designed and implemented to investigate cross-cultural differences in preferences for contributing to local public goods. The research investigates differences between contributions made by participants from the United States, Russia and Kazakhstan. In these experiments each participant has three options: keep money for herself, contribute to a public good that benefits a small group (the local good), or contribute to a public good that benefits the entire group (the global good). The researchers find significant differences in contribution patterns across the three cultures, and find that all participants contribute significantly more to the small group public good than to the large group public good.

Destination marketing, accommodation taxes, and mandated tourism promotional expenditures: may be time to reconsider.

Convention and Visitors Bureaus (CVBs) play an important role in the destination marketing matrix. As a rule, most of the funds that support the marketing efforts of these organisations come from a pool of state legislated accommodation tax funds that have been collected from visitors to the destination. This paper questions the mandated use of these tax revenues for destination marketing, noting that for many communities such expenditures may fail to represent their best usage.

Power Laws, CEO Compensation and Inequality

We observe that CEO compensation and top incomes in the US have both been increasing rapidly over the last thirty years. We hypothesize that the trends in CEO compensation have been caused by the same economy-wide factors that have contributed to increases in income. We test this hypothesis by using ExecuComp and IRS tax data to estimate power law distributions and compare the behavior of these distributions over time. Using linear regression techniques, we estimate a power law distribution for CEO compensation and individual income. We find that the parameters of income distribution and the distribution of CEO compensation are correlated.

Power Laws in Real Estate Prices? Some Evidence

Power law distributions have previously been observed in data like city-size distributions (Zipf’s Law), income distributions, and financial asset prices. In this paper we explore the distribution of real estate prices in Charleston County, South Carolina. We fit both a power law, lognormal and exponential distributions to the data and compare the goodness of fit among the distributions. We find that the best fit distribution lies somewhere between the lognormal and power law distributions. We estimate how the power law exponent changes over time and find a potential relationship between the shape of the power law distribution and the bursting of the real estate bubble in 2007.

Combatting the Joy of Destruction with Pro-Social Behavior

In this experiment we examine the impact of hugs (a pro-social behavior) upon behavior in the Joy of Destruction (JoD) game. Previous research on JoD indicates that up to 40% of experimental participants will choose to lower another participants earnings even in the absence of any incentive to do so. Building upon previous work indicating that hugs cause oxytocin to be released in the human brain, and that oxytocin can increase “moral” behavior, we hypothesize that hugging will reduce the spiteful behavior typically exhibited in the JoD. We find evidence to support this hypothesis. We also examine the role of personality, and find no correlation between scores on either the Big Five Inventory or the Mach-IV Inventory and behavior in the JoD.

Wealth Inequality and CEO Compensation

Over the past twenty years there has been a dramatic increase in both CEO pay and the wealth of the richest Americans. We examine three hypotheses regarding the relationship between wealth inequality and CEO compensation: first, that the increase in CEO income inequality helped cause increased wealth inequality; second, that increases in wealth inequality helped cause increased CEO income inequality; and third, that both types of inequality are caused by a third factor. We test these hypotheses by using ExecuComp and Forbes 400 data to estimate power law distributions and compare the behavior of these distributions over time. We find no support for any of the three hypotheses.