The Effect of Property Tax on Income Redistribution in Selected African Countries

Round 1

Reviewer 1 Report

Comments

 

This paper investigates the role of a tax on the redistribution of income, and property tax is no exception. One key area that income redistribution curbs is the area of income inequality of which, statistically, most African countries have a high-income inequality due to their high Gini coefficient. This study examines the effect of property tax on income redistribution in seven Africa countries from 1990 to 2019. The variables used in the study are property tax, Gini coefficient (proxy for income redistribution), income tax, employment rate, GDP per capita growth, and corruption. The Panel Autoregressive Distributed Lag (PARDL) was employed as the econometric technique approach. The findings of the study reveals that property taxes have a positive and significant relationship with income redistribution in the long run in the seven African countries studied. The study recommends the increase of property tax to further reduce income inequality.

My suggestions to the authors for the improvement of the paper relate to the following:

1. The research has interesting and valid findings and is well-written and succinctly presented. 
2. The authors should make clear the contribution of your article to the international literature in the introduction.
3. The authors enrich their references. In what way does inequality affect economic variables (Konstantakopoulou, 2016).
4. Data. The authors should be specific about the variables they use in their empirical analysis. They do not analyze the variables and their respective sources. 
5. The empirical part, in general, is well-designed and conducted.
6. Descriptive statistics of the variables in the empirical analysis need to be included.
7. In section: 5.6. Estimate of The Cross-Sectional PARDL Short-Run Results (Pooled Mean Group), what is the pooled mean group? May estimator? Please make it clear.
8. Authors should put more effort and thoroughly discussing point estimates, estimated effects, and the intuition behind the results backed up by the literature. 

 

Reference

Konstantakopoulou I. Further Evidence on Import Demand Function and Income Inequality. Economies. 2020; 8(4):91. https://doi.org/10.3390/economies8040091

 

 

 

Author Response

The authors should make clear the contribution of your article to the international literature in the introduction.

The contribution of the study has been refined. Please refer to the last paragraph of the introduction.

 Data. The authors should be specific about the variables they use in their empirical analysis. They do not analyse the variables and their respective sources. 

The data used in the study have been outlined in a table format for easy understanding. Please refer to page 6.

Descriptive statistics of the variables in the empirical analysis need to be included.

Descriptive statistic is included. Please refer to page 6

In section: 5.6. Estimate of The Cross-Sectional PARDL Short-Run Results (Pooled Mean Group), what is the pooled mean group? May estimator? Please make it clear.

This section has been omitted. The study now focuses on the long run result.

Authors should put more effort and thoroughly discussing point estimates, estimated effects, and the intuition behind the results backed up by the literature. 

The results have been thoroughly refined and backed up by literature.

Find attached proof of language editing

Author Response File: Author Response.pdf

Reviewer 2 Report

In the manuscript titled The Effect of Property tax on Income Redistribution in selected African countries, Ireen Choga and Fiyinfoluwa Giwa performed the effect of property tax on income redistribution in seven Africa countries from 1990 to 2019 and demonstrated property taxes have a positive and significant relationship with income redistribution in the long run in the seven African countries studied. This study contains some interesting findings and is valuable for the understanding of the effect of property tax on income redistribution.

However, lack of the standardization of details is the major flaw of the study. Therefore MINOR revision has to be done before this manuscript could be accepted for publication in the Sustainability .

 

Major comments: 

1.There is no need for the background review to be a separate section, the recommendations and introduction should be integrated.

2.In the literature review part, there are a few papers cited, so it is suggested to refer to some high-quality papers. And literature review writing can be more professional.

3.There are too many subdivisions in RESULTS AND DISCUSSIONS, and it is suggested that content can be slightly more refined.

4.The format of the table can be more standardized, smaller and centered like the text. 

 

Minor comments :

1.Finally 13, 18 and 28 references, they have no period. 

2.The format of references is not standard. All references do not give the journal name, and some do not give the page number and volume number.

Perhaps you can refer to the detailed formatting of this paper , I hope this will be helpful to you.

Comments for author File: Comments.pdf

Author Response

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Author Response File: Author Response.pdf

Reviewer 3 Report

Thank you very much for the opportunity to read the article. The subject matter of the article is interesting, but the article needs improvement.

 

1.    It is worth emphasizing the innovative nature of the research and the authors' contribution to economic theory and practice. What gap have the authors found in their previous analyses?

2.    Literature on the nexus between property tax on income redistribution is too weak in the manuscript. The authors do not highlight the importance of this issue.

3.    Methodology and math expression are poor, please revise them. Honestly, the methodology has no innovation points here.

4.    Conclusion part should include the policy implications, future research direction, etc.

5.    It should be emphasized that the Gini coefficient is an indicator of income distribution inequality while applying the Gini coefficient as the proxy for income redistribution.

6.    When it comes to the introduction part, the reference format is so messy, please revise it according to the journal’s publication standard.

Author Response

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Author Response File: Author Response.pdf

Reviewer 4 Report

The paper presents original research that adds new insight to the field. However, I would still suggest the following considerations to further improve the document.

I would suggest authors in the Introduction not only report statistical information but emphasize what is done and what's lacking in the scientific literature which could support the relevance of the research. And also maybe not to provide figures in the Introduction. I would suggest adding the exact value of Gini coefficients in Introduction (Lines 26-28).

What is the difference between Sections Background and Literature review? I suggest combining both Sections. The literature review is not very clear as it provides only results of five previous research and it doesn't reveal the main idea of the research on how property tax should reduce income inequality/redistribution.

It is not clear why the authors choose Panel Autoregressive Distributed Lag (PARDL), and how this method is different from other regression models. Authors should provide details about the chosen methodology. Data is not described in the paper, i.e. what are the indicators for taxes, what is the research sample, and what is the period which is analyzed? I would suggest moving all the test results and intermediate calculations to Appendexes and to focus on the main results in Section 4. Why do authors choose to analyze countries separately? 

How do authors interpret their conclusion "A rise in GDP per capita growth will result in a 1.338-unit increase in income redistribution (GINI) for Cameroon, Eswatini, Madagascar, Mauritius, Morocco, South Africa, and Tunisia."? Does it mean that income redistribution increases with increasing GDP per capita growth or does it decreases? Or for example "when corruption increases by one unit, income redistribution (GINI) will tend to decrease by 2.356 units on average in the seven African countries under investigation" (Line 291-292), how authors would explain that increasing corruption decreases income redistribution? Because I would assume that increasing corruption increases GINI which shows that the situation is not getting better. As well, the conclusion about the main variable of interes property tax. Authors conclude "A 1 unit rise in property tax (LPTAX) increases income redistribution (GINI) by 3.421 units" and they recommend to "increase of property tax to further reduce income inequality" but what is the meaning of increasing GINI coefficient whether it is the reduction or increase of income inequality? As a higher Gini index indicates greater inequality, with high-income individuals receiving much larger percentages of the population's total income or the conclusions should be interpreted otherwise according to variables included in the model?

Also, I would suggest extending the Conclusion Section and providing more insights from the research not only mentioning that variable is significant or insignificant. 

 

 

Author Response

I would suggest authors in the Introduction not only report statistical information but emphasize what is done and what's lacking in the scientific literature which could support the relevance of the research.

The introduction has been refined.

And also maybe not to provide figures in the Introduction. I would suggest adding the exact value of Gini coefficients in Introduction (Lines 26-28).

The authors made no changes. The exact value of the Gini coefficient reflects on the figure. The authors are of the opinion that the figure reduces the cumbersomeness of the introduction hence they retained figure 1.

What is the difference between Sections Background and Literature review? I suggest combining both Sections.

The introduction and background is integrated. Please refer to pages 1 and 2.

The literature review is not very clear as it provides only results of five previous research and it doesn't reveal the main idea of the research on how property tax should reduce income inequality/redistribution.

More articles are sited in the literature section and it is also more refined. The nexus between property tax and income redistribution is now backed up by literature.

It is not clear why the authors choose Panel Autoregressive Distributed Lag (PARDL), and how this method is different from other regression models. Authors should provide details about the chosen methodology.

Looking at other related articles, The PARDL method seems to be well suited for the objective. This has been explained the literature review.

Data is not described in the paper, i.e. what are the indicators for taxes, what is the research sample, and what is the period which is analyzed?

The data used in the study have been outlined in a table format for easy understanding. Please refer to page 6.

I would suggest moving all the test results and intermediate calculations to Appendexes and to focus on the main results in Section 4.

The authors made no changes to the format of the results. This is because the related published articles on MDPI do not have results in the appendixes.

Why do authors choose to analyse countries separately? 

This section has been omitted. The study now focuses on the long run result.

Round 2

Reviewer 1 Report

Τhe authors have not responded to comment 2, 3 and 7.

My suggestions to the authors for the improvement of the paper relate to the following:

1. The research has interesting and valid findings and is well-written and succinctly presented. 
2. The authors should make clear the contribution of your article to the international literature in the introduction.
3. The authors enrich their references. In what way does inequality affect economic variables (Konstantakopoulou, 2016).
4. Data. The authors should be specific about the variables they use in their empirical analysis. They do not analyze the variables and their respective sources. 
5. The empirical part, in general, is well-designed and conducted.
6. Descriptive statistics of the variables in the empirical analysis need to be included.
7. In section: 5.6. Estimate of The Cross-Sectional PARDL Short-Run Results (Pooled Mean Group), what is the pooled mean group? May estimator? Please make it clear.
8. Authors should put more effort and thoroughly discussing point estimates, estimated effects, and the intuition behind the results backed up by the literature. 

 

Reference

 

Konstantakopoulou I. Further Evidence on Import Demand Function and Income Inequality. Economies. 2020; 8(4):91. https://doi.org/10.3390/economies8040091

Author Response

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Author Response File: Author Response.pdf

Reviewer 4 Report

Authors should review the format requirements for tables. 

I still do not find a clear justification for the Panel Autoregressive Distributed Lag (PARDL) model, and how this method is different from other regression models. The authors just state that "Panel ARDL allows for the estimate of 127 long-run relationships". 

Also, it is not clear how the authors justify their main recommendation "The study recommends the increase of property tax to further reduce income inequality". Is it applicable in African countries and wouldn't it increase income inequality if the tax burden increases?

Author Response

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Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report

The final version of the paper has improved.