FISCAL ZONING AND FISCAL EXTERNALITIES

This research studies the location of development within local governments that are overlapped by multiple school districts. The hypothesis is that local governments will be more permissive in granting development rights within its boundaries as their share of the school district's total area declines because the fiscal costs of student education are shared across communities outside their boundaries. The preferred estimates employ a bonier discontinuity design within 0.2 miles of school district boundaries to compare 2001 to 2011 land development from satellite imagery data in Ohio. The findings support the hypothesis for incorporated municipalities, but not among unincorporated governments.