Abstract
This paper examines a spatial interdependence of innovation and diffusion of a new tax base in the case of parcel tax adoption across California school districts. The adoption of parcel taxes—typically a lump-sum tax per parcel of real properties—has been geographically uneven. In this paper, we answer whether school parcel tax adoption is a process of policy diffusion from learning by examining spatial patterns of adoption through spatial analysis. We conclude that the home price cap, per pupil current operating spending, together with the parcel tax adoption in the neighboring school districts are the main factors for the adoption and diffusion of this special purpose tax, parcel tax. This research contributes to the literature by accounting for the spatial effects in the diffusion process of parcel taxes.