
Research
Publications in refereed journals
- « Local taxation and tax base mobility : Evidence from France », T. Ly, S. Paty, Regional Science and Urban Economics, 2020.
Local taxation and tax base mobility : Evidence from France
Abstract
This paper investigates the impact of tax base mobility on local taxation. First, we develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We and that, in the presence of a budget compensation, decreasing capital intensity in business property tax base, composed of capital and land, increases the business property tax rates and decreases the tax rates on residents. We test this result using a French reform which changed the composition of the main local business tax base in 2010. Difference-in-difference estimations show that in 2010, the reduction in tax base mobility indeed resulted in a 14% rise in business property tax rates and a reduction in housing tax rates of 1.3%, compared to pre-reform average levels.
- « Sub-metropolitan tax competition with mobile household and capital », T. Ly, International Tax and Public Finance, 2018.
Sub-metropolitan tax competition with mobile household and capital
Abstract
This paper investigates the efficiency properties of tax competition between submetropolitan jurisdictions when capital, residents and workers are mobile, and both households and firms compete for local land markets. We analyze two decentralized equilibria: (1) with a local tax on residents and two separate local taxes on capital and land inputs, efficiency is achieved and the existence of a marginal fiscal cost due to residents’ mobility is revealed; (2) combination of the taxes on capital and land inputs into a single business property tax leads local authorities to charge inefficiently high taxation on capital. We show that capital mobility induces a reduction in the business land taxation and local public inputs are used to offset the distorting effects of the property tax, accounting for the distorting impact of workers’ mobility.
Working papers
- « Taxes, traffic jam and spillover in the metropolis », T. Ly, Working Paper, 2021
Taxes, traffic jam and splillover in the metropolis
Abstract
This paper studies local governments’ public policies in a metropolitan area plagued by traffic congestion, where both residents and workers consume local public goods.
We develop a new spatial sub-metropolitan tax competition model which features a central city surrounded by suburban towns linked by mobile capital and mobile residents who commute to work.
We show that Pareto-efficiency is achieved if towns can retain their workers using labor subsidies.
Otherwise, traffic congestion in the city is inefficiently high and local governments respond by setting inefficient public policies:
(1) the city over-taxes capital and under-taxes residents, which leads to too little capital and too many residents in the city;
(2) local public goods are under-provided in the city and over-provided in the towns.
- « Ownership incentives and housing affordability: Evidence from France », S. Chareyron, T.Ly, Y. Trouvé-Sargison, Working paper, 2021
Ownership incentives and housing affordability: Evidence from France
Abstract
Are ownership incentive policies inevitably accompanied by detrimental inflationary effects?
To address this issue, we develop a theoretical model in which owners of new housing benefit from a homeownership subsidy or a rental investment incentive. We show that while both incentives increase the price of the new housing, they reduce old housing prices and have an ambiguous impact on the average housing price. These effects result from residential spillovers from the old housing market to the new housing market. We test these findings empirically by exploiting a 2014 French reform in the metropolitan area of Lyon which intensified both incentives. Difference-in-difference estimates confirm our theoretical predictions: two years after the reform, the price of new housing increased by 30% and the price of old housing decreased by 7%. Taking both markets together, the overall effect is non-significant. The share of new housing transactions increased by 25%.
- « Tax competition on the extensive and intensive margins », T. Ly, D.R. Agrawal, R. Parchet
Tax competition on the extensive and intensive margins
Abstract
Tax administration is costly and may discourage some governments from utilizing certain taxes, this becoming tax havens. This paper develops a tax competition model in which jurisdictions first decide whether or not to levy a tax rate and then decide what tax rate to set to competefor mobile shoppers. We address the following questions: (i) How is the equilibrium tax ratedetermined when taxing jurisdictions can decide to become tax havens? (ii) How do tax rate and number of tax havens differ when taxes are chosen competitively compared to when they are set by a social planner? We show that when the equilibrium number of tax havens is low [high], a positive? Scal externality dominates [is dominated by] a negative consumption externality, the equilibrium tax rate is lower [larger] and the number of tax havens is larger [lower] than in a social planner equilibrium. Using a dataset of US counties, the model is estimated structurally. We show that the tax rates are around 11% too low and the number of tax havens is up to 17% too high compared to the social optimum.
Available upon request
- « Fourniture de biens publics en présence de préférences altruistes : une approche redistributive avec sélection adverse« , T. Ly, HAL., 2014
Fourniture de biens publics en présence de préférences altruistes : une approche redistributive avec sélection adverse
Abstract
Cette étude porte un nouvel éclairage sur la fourniture d’un bien par une autorité publique à des agents ayant des préférences altruistes. Elle repose sur une généralisation du modèle de Besley et Coate (2002). Il y est montré que lorsque le niveau d’altruisme relatif est une information privée des agents, une interprétation de ce paramètre plus précise que celle qui en est communément faite doit être effectuée. L’altruisme relatif mesure la manière dont un agent perçoit sa situation relativement à celle d’autrui. Ainsi, afin de pallier son manque d’information, le gouvernement doit favoriser d’autant plus un agent qu’il a un niveau d’altruisme éloigné du niveau moyen. Il est également montré que lorsque le régulateur n’observe pas le type des agents, il est contraint à un arbitrage entre équité et efficacité. Sa règle de provision optimale doit donc tenir compte non seulement des préférences des agents mais également des inégalités que cette politique peut générer.
Work in progress
- « Competition for greener regions: environmental policy and agglomeration », T. Ly, R. Gaté, S. Legras
Competition for greener regions: environmental policy and agglomeration
Abstract
This paper studies the effects of environmental policy competition among regional governments on pollution emission levels. We build a theoretical model including two regions with asymmetric agglomeration economies that implement an environmental policy fostering use of low-carbon transport mode. We show evidence of a key interplay between attractiveness, tax collection costs and aggregate pollution. A city benefiting from stronger agglomeration economies suffers from too much pollution emissions. However, fiscal competition prevents the region with lower agglomeration economies from being greener than the larger region.
- « Can private schools slow down the capitalization of public school quality into house values ? Evidence from Shanghai », T. Ly, T. Wang, C. Zhan, Z. Zhao
Can private schools slow down the capitalization of public school quality into house values ? Evidence from Shanghai
Abstract
This paper uses a geographic regression discontinuity design to estimate the effect of private schools on supply efficiency and equality of elementary education supply. The study finds that private schools improve the spatial supply efficiency of elementary education significantly and reduce education inequality. The results show that private schools can markedly slow down the capitalization of public school quality into house values by 2.4 percent. This study provides an important basis for evaluating the role of social capital in elementary education. It also provides a new clue to optimize spatial allocation of elementary education resources in order to curb an overheated housing prices in specific regions.
Project
« Sorting, tax competition and the rise of local tax heavens », T. Ly, R. Parchet
Awards
- Graduate Student Paper Award of the North American Regional Science Council (NARSC), 2019
→ Awarded to: « Taxes, traffic jam and spillover in the metropolis »
- PhD Prize of the French Economic Association (AFSE), 2019
→ Awarded to: « Tax competition within metropolitan areas » p>

The 2019 AFSE PhD Prize has been awarded to Tidiane Ly for his thesis entitled “Tax competition within Metropolitan areas”, conducted at the University of Lyon 2 under the supervision of Florence Goffette-Nagot and Sonia Paty. The jury was really impressed by the originality, the quality and the rigor of the work carried out. The jury also greatly appreciated Tidiane’s wish to provide policy recommendations from his theoretical investigations and findings. Indeed, his thesis helps municipalities and lower-level jurisdictions in their policy instrument choice, and suggests that reforming the local institutional context requires to account for the specific responses of local governments.
Conferences & Presentations
- Annual Meeting of the National Tax Association (NTA), november 2019, Tampa
- Annual Meeting of the North American Regional Science Council (NARSC), november 2019, Pittsburgh
- Invited Seminar Cesaer, INRA october 2019, Dijon
- Annual Meeting of the French Economic Association (AFSE), june 2019, Orléans
- Workshop on economics of taxation and public expenditures, june 2019, Barcelona
- Swiss workshop on local public finance and regional economics, may 2019, Lugano
- Invited Seminar Università della Svizzera italiana, november 2018, Lugano
- Public Economics at the Regional Level (PEARL) workshop, september 2018, Zermatt
- European Public Choice Society conference, april 2018, Roma
- Invited Seminar Economics and Taxation Group, Panthéon ASSAS, december 2017, Paris
- Workshop Public Policies, Cities and Regions, december, 2017, Lyon
- Public Policies and Spatial Economics Seminar, october 2017, Lyon
- Rhône Spatial Economics Workshop, march 2017, Geneva
- Annual Meeting of the Urban Economics Association (UEA), november 2016, Minneapolis
- Public Policies and Spatial Economics Seminar, october 2016, Lyon
- Public Economics at the Regional Level (PEARL) workshop, september 2016, Santiago de Compostela
- Annual Meeting of the French Economic Association (AFSE), june 2016, Nancy
- Journées de Microéconomie Appliquée (JMA), june 2016, Besançon
- Workshop Political Economy and Local Public Finance, september 2015, Lille
- GATE Research Seminar, october 2015, Lyon
- Public Policies and Spatial Economics Seminar, may 2015, Lyon
- GATE Seminar, december 2014, Lyon