Urban sprawl and local fiscal burden: analysing the Spanish case

Urban sprawl is rapidly occurring in many Spanish urban areas. The objective of this paper is to evaluate how the trend of building dispersion of new residential areas may be affecting the fiscal stability of local governments in Spain. The wide diversity of the characteristics of Spanish urban area...

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Bibliographic Details
Published in:Empirica 2019-02, Vol.46 (1), p.177-203
Main Authors: Varela-Candamio, Laura, Rubiera Morollón, Fernando, Sedrakyan, Gohar
Format: Article
Language:English
Subjects:
Cartography
Censuses
Decision makers
Econometrics
Economics
Economics and Finance
European Integration
Heterogeneity
Industrial Organization
International Economics
Local government
Macroeconomics/Monetary Economics//Financial Economics
Original Paper
Public Finance
Residential areas
Taxation
Urban areas
Urban growth
Urban planning
Urbanization
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Summary:Urban sprawl is rapidly occurring in many Spanish urban areas. The objective of this paper is to evaluate how the trend of building dispersion of new residential areas may be affecting the fiscal stability of local governments in Spain. The wide diversity of the characteristics of Spanish urban areas as well as the existence of very similar local fiscal structures make this case particularly interesting. After delimiting the urban areas and the spatial unit of analysis, a precise index of urban sprawl, calculated with geo-referenced digital cartography, is used. Using the spatially disaggregated information of taxes from the Spanish National Institute for Fiscal Studies allows for a measure of fiscal burden by local areas and the ability to distinguish among types of taxes. Control variables are also available at the local level from the Spanish Census and other databases. Two methods, quantile regressions and ordinary least squares, are used in order to measure not only the average change but the heterogeneity across the distribution of the local fiscal burden associated with the changes in urban sprawl, whilst controlling for other explanatory variables in the model. The results indicate that higher levels of urban sprawl imply higher local fiscal burden. By tax categories, the phenomenon of urban sprawl particularly affects both local indirect and direct taxation. These results suggest that local decision-makers should consider urban planning as one of the fundamental tools to assure long-term local fiscal sustainability.
ISSN:0340-8744
1573-6911
DOI:10.1007/s10663-018-9421-y