PROPERTY TAXATION AS A DETERMINANT OF SCHOOL DISTRICT EFFICIENCY.
Recent theoretical contributions have emphasized the favorable incentive
property taxation. The object of this paper is to confront these theories
data on student performance. The institutional setting in Norway is well
suited to analyzing the effects of property taxation because we
can compare school districts with
and without property taxation. In addition, we focus on an alternative
incentive mechanism – competition between school districts.
The empirical results indicate that students in school districts
that levy residential property taxes perform better at the
national examination than students in comparable school districts. Strategic
interaction in school quality is present, but the magnitude of the interaction effect