Political Economy of Property Tax Reform: Hawaii’s Experiment with Split Rate Property Taxation

Economic theory suggests that switching from a general property tax to a split-rate tax increases land use efficiency and stimulates urban core development while preserving the environment and reducing urban sprawl. Under split-rate property taxation, land is typically taxed at a significantly higher rate than improvements. Beginning in 1965 Hawaii experimented with a statewide split-rate property tax system to encourage economic growth and effect land reform. The experiment was ended in 1977. Following the transfer of property taxing powers to the counties in 1978, some counties brought back the split-rate property tax at times. Since 2006, Kauai County has adopted the unusual practice of taxing improvements at a higher rate than land for most property classes. This paper chronicles and explains the rationale behind Hawaii state and county experiments with split rate property taxation.Property taxes, split rate property taxation, tourist taxes

Weight Gain in Adolescents and Their Peers

Despite the urgent public health implications, relatively little is yet known about the effect of peers on adolescent weight gain. We describe trends and features of adolescent BMI in a nationally representative dataset and document correlations in weight gain among peers. We find strong correlations between own body mass index (BMI) and peers’ BMI’s. Though the correlations are especially strong in the upper ends of the BMI distribution, the relationship is smooth and holds over almost the entire range of adolescent BMI. Furthermore, the results are robust to the inclusion of school fixed effects and basic controls for other confounding factors such as race, sex, and age. Some recent research in this area asks whether or not adolescent weight gain is caused by peers. We discuss the econometric difficulties in plausibly estimating such effects. Our results do not rule out the existence of these types of social network effects.obesity, peer effects, adolescent health

What Is a Peer? The Role of Network Definitions in Estimation of Endogenous Peer Effects

We employ a standard identification strategy from the peer effects literature to investigate the importance of network definitions in estimation of endogenous peer effects. We use detailed information on friends in the Adolescent Longitudinal Health Survey (Add Health) to construct two network definitions that are less ad hoc than the school-grade cohorts commonly used in the educational peer effects literature. We demonstrate that accurate definitions of the peer network seriously impact estimation of peer effects. In particular, we show that peer effects estimates on educational achievement, smoking, sexual behavior, and drinking are substantially larger with our more detailed measures than with the school-grade cohorts. These results highlight the need to further understand how friendships form in order to fully understand implications for policy that alters the peer group mix at the classroom or cohort level.peer effects, education, adolescent health

Identifying Endogenous Peer Effects in the Spread of Obesity

Recent research in the New England Journal of Medicine (NEJM) purports to show the existence of peer effects in the spread of obesity. Using a dataset of 5124 residents from Framingham, Massachusetts spanning the years 1971 to 2003, the authors show correlations between own weight gain and friends’ and relatives’ weight gain over this period. They find, furthermore, that these results are strongest for males and weaker for females. We use the Adolescent Health Survey, a nationally representative dataset of seventh through twelfth graders in 1994 and 1996 to examine the effect of peers on weight gain. Despite the differences in the samples, we are able to replicate the pattern of results in the NEJM study. However the results are not robust to alternative definitions of the outcome variable. Furthermore, due to the various identification issues that are unresolved in both this and the NEJM paper, we conclude that the evidence for contagion effects in the spread of obesity is only suggestive at best.Peer effects, obesity, adolescent health

Bad Apples, Goody Two Shoes and Average Joes: The Role of Peer Group Definitions in Estimation of Peer Effects

The potential influence of peers and social networks on individual outcomes is important to a variety of educational policy debates including school vouchers, special education, middle school grade configurations and tracking. Researchers usually address the identification problems associated with credibly estimating peer effects in these settings but often do not account for ad-hoc definitions of peer-groups. In this paper, we use extensive information on peer groups to demonstrate that accurate definitions of the peer network seriously impact estimation of peer effects. We estimate the effect of peers’ smoking, drinking, sexual behavior and educational achievement on a teen’s propensity to engage in like-minded behavior and address the major identification problems that plague estimation of these effects.Peer Effects, Education, Adolescent Health

The Impact of I ntergovern mental Incentives on Student Disability Rates

Measured disability rates among school-age children and the associated spending on special education programs have risen steeply over the past thirty years. Currently, about 15 percent of U.S. school children are classified as "disabled." Many observers note that the special education funding programs established by state and federal governments create an incentive for local school districts to drive up disability rates, potentially accounting for some of the rise in measured disability rates. I use the experiences following a major reform of the special education funding system in California to examine this issue. Between 1996 and 1998, the state converted from a system that awarded funds based on the number of students classified as disabled in a district (with funding rates that varied across districts) to one based on total enrollment. This reform induced changes in the total funding awarded to different districts and also reduced the marginal revenue from classifying an additional student as disabled to zero. Consistent with standard models, I find that the California reform creates both "income" and "substitution" effects on the number of students classified as disabled.special education; fiscal incentives; disability rates; education finance reform

Weight gain in adolescents and their peers

Despite the urgent public health implications, relatively little is yet known about the effect of peers on adolescent weight gain. We describe trends and features of adolescent BMI in a nationally representative dataset and document correlations in weight gain among peers. We find strong correlations between own body mass index (BMI) and peers' BMI's. Though the correlations are especially strong in the upper ends of the BMI distribution, the relationship is smooth and holds over almost the entire range of adolescent BMI. Furthermore, the results are robust to the inclusion of school fixed effects and basic controls for other confounding factors such as race, sex, and age. Some recent research in this area considers whether or not adolescent weight gain is caused by peers. We discuss the econometric issues in plausibly estimating such effects while accounting for growth spurts and difficulties in defining adolescent obesity. While our work identifies correlations between adolescent BMI and peers' BMI, it is not intended to and cannot fully address the existence of endogenous peer effects.Obesity Peer effects Adolescent health