Are governmental accounting measures value relevant to the citizenry?

Abstract

We examine the relevance of governmental accounting information to the citizenry by analyzing the association between various financial and non-financial measures of local government performance and residential property values. The link between government performance measures and residential property values is based on a model of housing value capitalization developed by Yinger (1982). Using a model of firstdifferences, we find that changes in housing values are associated with government financial measures, including reported surplus and changes in outstanding debt. Further, we find that changes in housing values are also associated with non-financial measures of performance by county schools. Overall our results suggest that both financial and non-financial government performance measures are economically relevant to citizen property owners.

Citation

Copley, P.A. and Douthett,, E.B. (2014), "Are governmental accounting measures value relevant to the citizenry?", Journal of Public Budgeting, Accounting & Financial Management, Vol. 26 No. 4, pp. 583-613. https://doi.org/10.1108/JPBAFM-26-04-2014-B003