Professor Randall B. Bunker from the Arthur J. Bauernfeind College of Business at Murray State University is this week’s #RacerScholar. He co-authored the chapter, “The Economic Impact of Tax Policy Incentives: An Analysis of the Gulf Opportunity Zone Act of 2005,” of Volume 21 of Advances of Taxation.
Purpose – This research quantifies the economic impact of regional tax
policy incentives included in the Gulf Opportunity Zone Act of 2005.
Design/methodology/approach – This research utilized linear
mixed-effects modeling and multiple regression procedures with a matched
sample panel dataset from 2002 through 2008 containing real-world
county-level economic data.
Findings – The results indicated that the regional tax incentives
provided by the GO Zone Act did not generate significant increases in
key economic indicators included in this study. These tax incentives
were intended to spur economic recovery, but based on research findings,
they do not appear to have had the impact desired by Congress.
Research limitations/implications – Archival empirical data for the
affected region make this study possible but also limit the ability to
generalize these results to other regions. In addition, empirical
research utilizing real-world data can be prone to internal validity
issues that exist due to lack of environmental controls and other
possible causal factors.
Originality/value – This research adds to the existing literature by
using real-world county-level economic indicators to test the impact of
tax policy investment incentives at the regional level and minimizes
some of the issues addressed by prior empirical research and provides
evidence on the effectiveness of tax policy investment incentives at the
The Economic Impact of Tax Policy Incentives: An Analysis of thew Gulf Opportunity Zone Act of 2005
By Randall B. Bunker and William F. Shughart II
Advances of Taxation : 2014, vol. 21, pgs. 173-200