How Salience and Framing Alter the Behavioral Impacts of Property Tax Relief

New York State’s School Tax Relief Program, STAR, provides state-funded exemptions from school property taxes. From 2006-07 to 2008-09, these exemptions were supplemented with rebate checks. This paper asks whether these two algebraically equivalent but administratively distinct policies led to different behavioral responses. We estimate STAR’s impact on the price elasticity of demand for school quality. This elasticity is larger when the tax relief is most salient and when it is framed as a property tax reduction instead of as unlabeled income.

Nguyen-Hoang, P. & Yinger, J. How Salience and Framing Alter the Behavioral Impacts of Property Tax Relief. Public Finance and Management. .