Assist. Prof. Abdoulaye Ndiaye

Optimal Property Taxes Under Financial Friction

Abdoulaye Ndiaye’s research at CES will focus on the economic implications of property taxes on housing underutilization and migration patterns. Property taxes represent a significant portion of local government revenue and are characterized by considerable spatial heterogeneity. For example, in New York, property tax rates range from 1.58% to 2.64%, while in California, they are between 0.61% and 0.83%.

The primary objective of Mr. Ndiaye’s (joint with Josh Coven, Sebastian Golder, and Arpit Gupta), is to analyze how different levels of property taxation influence location choice decisions, household mobility, and overall welfare. The paper will use a theoretical model complemented by empirical evidence to assess the trade-offs inherent in property tax policies. Property taxes constitute around 30% of local government revenue, translating to about $581 billion annually. Initial findings suggest that higher property taxes can lead to increased migration, affecting the local demographic makeup and housing market dynamics. The paper will explore how property taxes impact welfare, considering factors like agglomeration economies and the size of the tax base.

Mr. Ndiaye's research focuses on macroeconomics and public finance. During his stay at CES, Mr. Ndiaye will give a talk on the above paper and looks forward to sharing these insights with the CES community and contributing to the broader economic discussions.

Abdoulaye Ndiaye is Assistant Professor of Economics at NYU Stern School of Business, prior to which he was a Research Economist at the Federal Reserve Bank of Chicago. He received a PhD in Economics from Northwestern University and a BS and MS in Economics and Finance from École Polytechnique in Paris. He has been a Visiting Scholar at the United Nations, Harvard University and Princeton University.