Department of Economics

Examining differences between school districts that have passed and school districts that have failed to pass a parcel tax provides a unique opportunity to study how implementing a parcel tax may affect different outcomes. This paper examines the effect of implementing parcel taxes on school achievement, family income, the percentage of students participating in free/reduced price lunch programs, family size, and property values in the state of California. I estimate the effect of parcel taxes using a difference-in-difference model over a panel of 147 school districts. I find that compared to districts that voted but did not implement a parcel tax, districts that implemented parcel taxes see (1) no effect on family size, (2) a reduction in the percentage of students participating in free/reduced price lunch programs, (3) a decrease in improvement in school achievement, and (4) reduced improvement in property values. In addition, the effect on school achievement depends on the initial state of the school district prior to implementing the parcel tax.