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This study consisted of a theoretical and empirical analysis of the property tax shifting behavior of the monopolist that is subject to rateof-return regulation. The theoretical analysis found that if the rateof-return constraint is continuously enforced, then the property tax shifting behavior of the profit or sales maximizing regulated monopolist will not differ from that of its unregulated counterpart. If, however, the regulatory constraint is only sporadically enforced, then differences in tax shifting behavior between regulated and unregulated monopolists can exist. Whether regulation is continuous or sporadic, however, merely allowing the regulated monopolist an after-tax return cannot guarantee that the full burden of the public utility property tax will rest upon the consumer. The empirical analysis consisted of deriving estimating equations that included the effective property tax rate as one of the independent variables explaining profit rates for a sample of telephone companies. The crosssection and time series of cros;.-sections regressions over the time period 1963-1970 indicated that these public utilities typically did not shift 100 percent of the property tax burden. Perhaps more importantly, the analysis revealed that the degree of shifting can differ between groups within one time period and across time for any one group. The size of the partial adjustment coefficient and the positive relationship between shifting estimates and financial performance were found to be consistent with theoretical models in which the firm aims for a less-than-maximum return and attempts to shift the tax via short-run adjustments in product and/or factor prices. This study concluded that full shifting of the public utility property tax would be the exception rather than the rule, and that the capricious manner of this shifting makes the property tax an inefficient way of imposing an excise tax on the consumption of utility services.