Edwards (1984): Site Value Taxation in Australia

Summary

Mary E. Edwards's "Site Value Taxation in Australia: Where Land Is Taxed More and Improvements Less, Average Housing Values and Stocks Are Higher," published in the American Journal of Economics and Sociology (Vol. 43, No. 4, October 1984, pp. 481–495), is an empirical study of Australian local-government land rating.[1] Australian local governments choose among three rating bases — assessed annual value, improved capital value, or unimproved (site) capital value — giving Edwards cross-state and cross-time variation to test against. Using multivariate regression on 1951/52–1974/75 data across New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania, she finds that where local rates fall more heavily on unimproved land value and less on improvements, the average value of new housing is significantly higher and the total housing stock is substantially larger.[1]

The paper positions itself against two earlier, more impressionistic Australian studies it reviews in detail: A.R. Hutchinson (1963), whose simple state-group comparisons found land-value-rating states outperforming improvement-value-rating states on housing-stock growth, and Woodruff & Ecker-Racz (1969), whose 1964 field trip and interviews with Australian valuers found "almost unanimously negative" opinions that rating basis affected development patterns.[1] Edwards's regression approach is offered as a more rigorous test than either, and her conclusion sides substantially with Hutchinson: "the weight of the evidence now at hand strongly indicates that if a new or reformed tax system is administered honestly, efficiently, and equitably, then a site value tax will result in a more rapid pace of development."[1] She also draws a direct comparison to Pittsburgh's contemporaneous graded (split-rate) tax as an American parallel to the Australian rating systems she studies.[1]

The paper is a revised version of Edwards's master's thesis at the University of Missouri, written in the tradition of the Harry Gunnison Brown Memorial Lecture on site-value taxation.[1]

Bears On

• Outcome: Split-rate taxation increases construction — an earlier, cross-national empirical test of the same mechanism
• Concept: Site value — the tax base whose effects the study measures

See Also

• Site Value — the tax base Edwards studies
• Split-Rate Taxation — the general policy family this Australian evidence bears on
• Gemmell, Grimes & Skidmore: New Zealand — the equivalent New Zealand empirical literature on land-value rating
• Dwyer: Taxable Capacity of Australian Land — a later, revenue-focused Australian Georgist study
• Pittsburgh — the graded-tax jurisdiction Edwards uses as a US comparison
• Land Is a Big Deal (book) — the discovery source citing this study

Sources

1. Mary E. Edwards, "Site Value Taxation in Australia: Where Land Is Taxed More and Improvements Less, Average Housing Values and Stocks Are Higher," The American Journal of Economics and Sociology 43(4) (October 1984), pp. 481–495 — used for the study's methodology, data period (1951/52–1974/75), state coverage, regression findings on new-house values and housing stock, the review of Hutchinson (1963) and Woodruff & Ecker-Racz (1969), the Pittsburgh comparison, and the concluding assessment (quotation under 50 words). JSTOR · Free PDF (Cooperative Individualism)
2. Land Is a Big Deal (Doucet, 2022), Ch. 21 — discovery source citing this study as part of the international empirical evidence on site-value rating. Book page