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Local public goods and the demand for high-income municipalities

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  • Boustan, Leah Platt

Abstract

Affluent towns often deliver high-quality public services to their residents. I estimate the willingness to pay to live in a high-income suburb, above and beyond the demand of wealthy neighbors, by measuring changes in housing prices across city–suburban borders as the income disparity between the two municipalities changes over time. I find that a $10,000 increase in town-level median income is associated with a seven percent increase in housing values at the border. The estimated demand for high-income municipalities is primarily driven by school quality and lower property tax rates.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 76 (2013)
Issue (Month): C ()
Pages: 71-82

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Handle: RePEc:eee:juecon:v:76:y:2013:i:c:p:71-82

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Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords: Suburbanization; Housing prices; Willingness to pay; Local public goods;

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