spb/wp10_uqo

1% Author: Simon-Pierre Boucher — contact@spboucher.ai2% ============================================================================3% UQO Working Paper No. 104% The Assessment Gap in Quebec: Vertical and Horizontal Inequity in5% Municipal Property Valuation6%7% Build:  latexmk -pdf main.tex   (or `make` in this directory)8% Figures are read from ../figures/, tables from ../results/tables/.9% ============================================================================10\documentclass[12pt,letterpaper]{article}1112% ---------------------------------------------------------------- encoding13\usepackage[utf8]{inputenc}14\usepackage[T1]{fontenc}15\usepackage[english]{babel}1617% ---------------------------------------------------------------- layout18\usepackage[letterpaper,margin=1in]{geometry}19\usepackage{setspace}20\onehalfspacing2122% ---------------------------------------------------------------- typography23\usepackage{mathptmx}24\usepackage{microtype}2526% ---------------------------------------------------------------- math27\usepackage{amsmath,amssymb,amsthm}2829% ---------------------------------------------------------------- tables30\usepackage{booktabs}31\usepackage{threeparttable}32\usepackage{makecell}33\usepackage{url}34\usepackage{pdflscape}35\usepackage{placeins}3637% ---------------------------------------------------------------- figures38\usepackage{graphicx}39\usepackage{subcaption}40\graphicspath{{../figures/}{./}}4142% ---------------------------------------------------------------- captions43\usepackage[font=small,labelfont=bf,labelsep=period,justification=justified,singlelinecheck=false]{caption}4445% ---------------------------------------------------------------- colours & links46\usepackage[dvipsnames]{xcolor}47\usepackage[colorlinks=true,linkcolor=NavyBlue,citecolor=NavyBlue,urlcolor=NavyBlue,breaklinks=true]{hyperref}4849% ---------------------------------------------------------------- bibliography50\usepackage[authoryear,round,semicolon]{natbib}51\bibliographystyle{aer}5253% ---------------------------------------------------------------- headings & lists54\usepackage{titlesec}55\titleformat{\section}{\large\bfseries}{\thesection.}{0.5em}{}56\titleformat{\subsection}{\normalsize\bfseries}{\thesubsection.}{0.5em}{}57\titleformat{\subsubsection}{\normalsize\itshape}{\thesubsubsection.}{0.5em}{}58\usepackage{fancyhdr}59\pagestyle{fancy}\fancyhf{}60\renewcommand{\headrulewidth}{0pt}61\fancyfoot[C]{\thepage}62\usepackage{enumitem}63\setlist{nosep,leftmargin=*}6465% ============================================================================66% METADATA67% ============================================================================68\newcommand{\WPnumber}{10}69\newcommand{\WPtitle}{The Assessment Gap in Quebec}70\newcommand{\WPsubtitle}{Vertical and Horizontal Inequity in Municipal Property71  Valuation: Evidence from 522{,}769 Sales Matched to the Assessment Roll}72\newcommand{\WPdate}{October 2026}73\newcommand{\WPversion}{1.1}74\newcommand{\WPkeywords}{property tax, assessment ratio, vertical equity, regressivity, ratio study, measurement error, Quebec}75\newcommand{\WPjel}{H71, H22, R51, R31}7677\newcommand{\WPauthor}{Simon-Pierre Boucher}78\newcommand{\WPaffiliation}{D\'epartement des sciences administratives\\79  Universit\'e du Qu\'ebec en Outaouais}80\newcommand{\WPemail}{simon-pierre.boucher@uqo.ca}81\newcommand{\WPaddress}{Gatineau -- Pavillon Alexandre-Tach\'e\\82  283, boulevard Alexandre-Tach\'e\\ Gatineau, Qu\'ebec, Canada J9A 1L8}8384\newcommand{\WPabstract}{%85Municipal property taxes are levied on assessed values, so any systematic86relationship between assessment ratios and market value redistributes the87tax burden within a municipality. We match 522{,}769 residential sales88recorded in Quebec between 2021 and 2026 to the triennial assessment rolls89of 625 municipalities at the parcel level and provide the first90province-wide ratio study of vertical and horizontal assessment equity for91a Canadian province. Because the \textit{Loi sur la fiscalit\'e92municipale} pins every roll to a single statutory market-condition date,93municipality~$\times$~roll~$\times$~sale-year fixed effects separate the94mechanical drift of ratios between reference dates from within-market95inequity by design. The central finding is that the measured degree of96regressivity hinges on the treatment of extreme assessment ratios. Under a97lenient 1/99 trim, the within-market elasticity of the assessment ratio98with respect to price is $-0.34$ ($-0.08$ under a rank instrument in the99spirit of Clapp, 1990) and 95\% of municipalities fall below the IAAO100price-related-bias band. Under the IAAO outlier rule, which removes 9\% of101sales concentrated in the bottom price decile, the elasticity is $-0.09$102($-0.01$ and insignificant under the instrument), the province-wide PRB is103$+0.02$, the COD is 17, and three quarters of municipalities meet the104vertical-equity standard. A piecewise specification shows that105proportionality holds across the upper 80\% of each market's price106distribution and fails only in the bottom quintile. Two patterns are107invariant to the trimming rule: condominiums are assessed proportionally108while single-family homes, plexes, older buildings, land-heavy properties109and small municipalities remain mildly regressive, and within-municipality110price-related bias widened in 2021--2022 when the post-pandemic boom pulled111prices away from the rolls. The implied overpayment by the bottom112within-market price decile ranges from about 6\% to 65\% depending on113whether extreme-ratio sales are treated as market transactions, and the top114decile underpays by 3--5\%; narrowing that range requires sale-validation115data that Quebec's registries do not currently provide.}116117\hypersetup{pdftitle={The Assessment Gap in Quebec}, pdfauthor={}}118119\begin{document}120121\input{sections/titlepage_anon}122123\setcounter{page}{1}124\input{sections/introduction}125\input{sections/literature}126\input{sections/institutional}127\input{sections/data}128\input{sections/methodology}129\input{sections/results}130\input{sections/robustness}131\input{sections/discussion}132\input{sections/conclusion}133134\appendix135\input{appendix/appendix}136137\newpage138\bibliography{references}139140\end{document}141