Tax capitalization, local public services on the property value of the impact-empirical test of multi-group-central city based on Tiebout-Oates model

On the basis of Tiebout´s theory about optimal provision of public goods and achieve conditions, We have tested Tiebout´s hypothesis on the basis of Chongqing district by operating an empirical model, and put some corresponding policies. This paper finds that in Chongqing China, although it has a significantly different conclusion from USA owing to the difference of urban structure, and we have take into account the impact of these differentiae. This paper draws a similar conclusion to Oates´ theory with full awareness of the impact of differentia resulting from different urban structure between Chinese and American cities. Thus we prove the validity of Tiebout´s theory. Our results indicate that property taxes does affect the value of owner occupied housing and thus imply that appreciable tax capitalization does occur in Chongqing ; and the quality of regional public servings have affected residential property values.