Public Finance Review, a professional forum devoted to economic research, theory, and policy applications, has awarded Dr. Shawn Rohlin with their Outstanding Paper Award of 2011.
Rohlin, an assistant professor of economics, co-authored "The Effect of Location-based Tax Incentives on Establishment Location and Employment across Industry Sectors" with Dr. Andrew Hanson of Georgia State University.
Their award-winning paper appeared in the March 2011 issue of PFR. It contributes important new evidence on the effects of the tax incentives on business decisions. Most state and local governments use various forms of tax incentives in attempts to attract or to maintain economic activity within their jurisdictions, but the actual effects of these incentives remain elusive. Hanson and Rohlin construct a theoretical model to examine the differential impact of location-based empowerment zone tax credits across industry sectors. They then use data from the Dun and Bradstreet survey of firms to estimate the sector impacts. Their results show that firms in industries with the largest reduction in total cost have an increased presence in empowerment zone areas, but also that these gains were offset by losses in other sectors. They also find differential responses by sectors in the short term versus the long term, depending largely on capital-labor substitution possibilities. These results are robust to a variety of estimation methods.