Parametric and non-parametric analysis of tax changes

Bugden, Jim, Waschik, Robert, Fraser, Iain M, Racine, Jeff (2016) Parametric and non-parametric analysis of tax changes. Global Business and Economics Review, 18 (5). pp. 533-549. E-ISSN 1745-1329. (doi:10.1504/GBER.2016.10000036) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

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Official URL
http://dx.doi.org/10.1504/GBER.2016.10000036

Abstract

In this paper, we examine the net effect of several major tax changes in Australia on residential property prices. Specifically, we consider the announcement and introduction effects that resulted from several policy changes including the introduction of the Goods and Services Tax (GST) and the accompanying First Home Owner Grant (FHOG). Using a large dataset of residential property sales in Melbourne, Australia, between 1992 and 2002 we estimate various models using parametric and non-parametric methods. While our parametric models suggest that the tax policy changes appear to have a statistically significant impact on house prices, no economically significant impact is detected by our non-parametric models, nor (upon closer inspection) by the parametric models themselves. Given the enormity of the sample size, this provides a telling example of the fundamental difference between statistical and economic significance and its implications for detecting government policy effectiveness

Item Type: Article
DOI/Identification number: 10.1504/GBER.2016.10000036
Uncontrolled keywords: Housing Policy, Tax Changes, Non-parametric Econometrics
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Iain Fraser
Date Deposited: 27 Apr 2017 10:13 UTC
Last Modified: 29 May 2019 19:00 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/61571 (The current URI for this page, for reference purposes)
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