Kudashev, R. and Picard, P.M. (2026). Floorspace price discontinuities and taxation in cross-border commuting areas Journal of Urban Economics, 155:1--16.
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Affiliated author
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Publication year2026
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JournalJournal of Urban Economics
Cross-border housing markets have become more prevalent in Europe since the establishment of the European Union. Using data from the functional urban area of Luxembourg, we document significant floorspace price discontinuities at the borders of Luxembourg with Belgium, France, and Germany. Employing a quantitative spatial urban model and spatial regression discontinuity techniques, we show that differences in tax rates and tax importing account for 8% and 13% of the observed price jump, respectively. The remaining price discrepancy is explained by differences in productivity and amenities.