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Ask and Ye Shall Receive? Predicting the Successful Appeal of Property Tax Assessments

Author

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  • Rachel N. Weber

    (Urban Planning and Policy Program, University of Illinois at Chicago, Chicago, IL, USA, rachelw@uic.edu)

  • Daniel P. McMillen

    (Department of Economics and Institute of Government and Public Affairs, University of Illinois at Chicago, Chicago, IL, USA)

Abstract

Appeal processes provide important opportunities to challenge administrative decisions, but adjudicators often lack access to information relevant to the disputed claim. This article examines the motivations for property tax assessment appeals as well as the factors that influence the decision to grant or deny these appeals. We ask whether and how the relative lack of comparable sales in a neighborhood influences the frequency of property assessment appeal applications and their likelihood of success. Using a data set of appeal applications submitted to the first two levels of assessment review in Chicago in 2000 and 2003, we estimate the probability of successful appeal for residential property owners using a sequential probit model. We find that information-rich environments have the potential to both temper the perception of individual mistreatment and improve the quality of assessor decision making. Appeals can compound the lack of uniformity in assessments found in markets with little sales activity.

Suggested Citation

  • Rachel N. Weber & Daniel P. McMillen, 2010. "Ask and Ye Shall Receive? Predicting the Successful Appeal of Property Tax Assessments," Public Finance Review, , vol. 38(1), pages 74-101, January.
    • Handle: RePEc:sae:pubfin:v:38:y:2010:i:1:p:74-101
    DOI: 10.1177/1091142109358703
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    References listed on IDEAS

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    1. William C. Goolsby, 1997. "Assessment Error in the Valuation of Owner-Occupied Housing," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 33-46.
    2. Marcus T. Allen & William H. Dare, 2002. "Identifying Determinants of Horizontal Property Tax Inequity: Evidence from Florida," Journal of Real Estate Research, American Real Estate Society, vol. 24(2), pages 153-164.
    3. Brent C. Smith, 2000. "Applying Models for Vertical Inequity in the Property Tax to a Non-Market Value State," Journal of Real Estate Research, American Real Estate Society, vol. 19(3), pages 321-344.
    4. McMillen, Daniel P. & Weber, Rachel N., 2008. "Thin Markets and Property Tax Inequities: A Multinomial Logit Approach," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(4), pages 653-671, December.
    5. Steven Shavell, 2006. "The Appeals Process and Adjudicator Incentives," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 1-29, January.
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    Citations

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    Cited by:

    1. William M. Doerner & Keith Ihlanfeldt, 2012. "An Empirical Analysis of the Property Tax Appeals Process," Working Papers wp2012_01_01, Department of Economics, Florida State University, revised Jul 2014.
    2. Elizabeth Plummer, 2014. "The Effects of Property Tax Protests on the Assessment Uniformity of Residential Properties," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 42(4), pages 900-937, December.
    3. William M. Doerner & Keith R. Ihlanfeldt, 2015. "The Role of Representative Agents in the Property Tax Appeals Process," National Tax Journal, National Tax Association;National Tax Journal, vol. 68(1), pages 59-92, March.
    4. Daniel McMillen & Ruchi Singh, 2020. "Assessment Regressivity and Property Taxation," The Journal of Real Estate Finance and Economics, Springer, vol. 60(1), pages 155-169, February.
    5. Justin M. Ross, 2012. "Interjurisdictional Determinants of Property Assessment Regressivity," Land Economics, University of Wisconsin Press, vol. 88(1), pages 28-42.

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