{"title":"Market Responses To Voter-Approved Debt","authors":"Jinhai Yu, Xin Chen, Mark D. Robbins","doi":"10.1086/716770","DOIUrl":null,"url":null,"abstract":"US local governments often seek voter approval through bond referenda prior to borrowing. Passing bond referenda increases borrowing authority and potential debt levels, which can influence government credit risk. Focusing on Texas local governments, we estimate the causal effects of bond authorization on credit risk with a regression discontinuity design. Credit risk is measured by the average bond yields of existing debt. For school districts, one standard deviation increase in authorized debt per capita causes bond yields to increase by approximately 9.9–22.5 basis points in the subsequent 12 months. We find no effects for cities and counties.","PeriodicalId":18983,"journal":{"name":"National Tax Journal","volume":"75 1","pages":"93 - 119"},"PeriodicalIF":1.8000,"publicationDate":"2022-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"National Tax Journal","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1086/716770","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 2
Abstract
US local governments often seek voter approval through bond referenda prior to borrowing. Passing bond referenda increases borrowing authority and potential debt levels, which can influence government credit risk. Focusing on Texas local governments, we estimate the causal effects of bond authorization on credit risk with a regression discontinuity design. Credit risk is measured by the average bond yields of existing debt. For school districts, one standard deviation increase in authorized debt per capita causes bond yields to increase by approximately 9.9–22.5 basis points in the subsequent 12 months. We find no effects for cities and counties.
期刊介绍：
The goal of the National Tax Journal (NTJ) is to encourage and disseminate high quality original research on governmental tax and expenditure policies. Articles published in the regular March, June and September issues of the journal, as well as articles accepted for publication in special issues of the journal, are subject to professional peer review and include economic, theoretical, and empirical analyses of tax and expenditure issues with an emphasis on policy implications. The NTJ has been published quarterly since 1948 under the auspices of the National Tax Association (NTA). Most issues include an NTJ Forum, which consists of invited papers by leading scholars that examine in depth a single current tax or expenditure policy issue. The December issue is devoted to publishing papers presented at the NTA’s annual Spring Symposium; the articles in the December issue generally are not subject to peer review.
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