Effectiveness of RCA Institutions to Limit Local Externalities: Using Foreclosure Data to Test Covenant Effectiveness
AbstractResidential community associations (RCAs) are said to be an efficient institutional agreement to limit local spillovers. While several studies have identified a positive marginal effect of RCA rules, none have explicitly measured the effectiveness of these institutions to limit local externalities. This study measures this effectiveness by estimating how the direct and spillover price impacts caused by foreclosure differ by RCA status. Using a spatial hedonic model that controls for selection bias using propensity score methods and coarsened exact matching we find that foreclosed RCA properties experience smaller direct foreclosure discounts and produce smaller spill-over effects than their non-RCA counterparts.
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Bibliographic InfoArticle provided by University of Wisconsin Press in its journal Land Economics.
Volume (Year): 87 (2011)
Issue (Month): 4 ()
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Web page: http://le.uwpress.org/
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
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