Geographic After-Tax Real Income Differentials and Population Growth Rates
Alexander, Gigi, Cebula, Richard J., Koch, James V., Atlantic Economic Journal
The purpose of this brief note is to empirically investigate the impact of geographic after-tax real income differentials on geographic population growth rate differentials. The focus is on population growth rates in Florida's 67 counties over the period 1980-88. The reason for this focus is the availability of geographically comparable living-cost indices for all of Florida's counties. These data permit one to convert after-tax income (by county) into real terms. Such living-cost data are not currently available for any other state.
The after-tax real income in county j, R.sub.j, is defined as R.sub.j= (Y.sub.j-T.sub.j)/C.sub.j, Y.sub.j = county j's 1984 per capita income; T.sub.j = per capita local taxes paid in county j in 1984; and C.sub.j = the cost of living index for county j for 1984.
To examine the impact of g. on geographic population growth rate differentials in Florida, estimate the following reduced-form equation:
P.sub.j = a.sub.o + a.sub.1, R.sub.j + a.sub.2. CST.sub.j, + a.sub.3 A.sub.j
+ a.sub.4 D.sub.j + a.sub.5 U.sub.j + a.sub.6 URB.sub.j + [micro], (1)
where: P.sub.j = the percent change in county j's total population, 1980-88; a.sub.o = constant term; R.sub.j = per capita after-tax real income in county j in 1984; CST.sub.j = a binary dummy variable indicating whether county j lies on the coast (the Atlantic Ocean or the Guff of Mexico), with CST. …