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A Direct Test of the Homevoter Hypothesis

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Author Info

  • Carolyn A. Dehring

    ()
    (Department of Insurance, Legal Studies and Real Estate, The University of Georgia)

  • Craig A. Depken, II

    ()
    (Department of Economics, University of Texas at Arlington)

  • Michael R. Ward

    ()
    (Department of Economics, University of Texas at Arlington)

Abstract

We propose a methodology that facilitates a direct test of the homevoter hypothesis, which posits that homeowner/voter support for a public good project is positively related to the project’s expected effect on property values. First, we estimate how events that indicate an increasing probability that the public good project will be undertaken impact local residential property values before the referendum is held. These pre-vote impacts are considered noisy signals to homeowners about the market’s assessment of the net marginal benefits of the project. Second, we aggregate these market signals to the precinct level and relate them to precinct-level voting results concerning the proposed project. We apply this method to the 2004 referendum in Arlington, Texas, concerning a publicly subsidized stadium to host the NFL Dallas Cowboys. The analysis supports the homevoter hypothesis and establishes a possible methodology for future evaluations in this small but growing empirical literature.

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File URL: http://college.holycross.edu/RePEc/spe/DehringDepkenWard_Voting.pdf
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Bibliographic Info

Paper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 0719.

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Length: 39 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:spe:wpaper:0719

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Keywords: economic impact; event studies; sports; property values; stadiums;

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  1. Hastings, Justine S. & Kane, Thomas J. & Staiger, Douglas O. & Weinstein, Jeffrey M., 2007. "The effect of randomized school admissions on voter participation," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 915-937, June.
  2. Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197, January.
  3. Brunner, Eric & Sonstelie, Jon & Thayer, Mark, 2001. "Capitalization and the Voucher: An Analysis of Precinct Returns from California's Proposition 174," Journal of Urban Economics, Elsevier, vol. 50(3), pages 517-536, November.
  4. Coates, Dennis & Humphreys, Brad R., 2003. "The effect of professional sports on earnings and employment in the services and retail sectors in US cities," Regional Science and Urban Economics, Elsevier, vol. 33(2), pages 175-198, March.
  5. Sonstelie, Jon C. & Portney, Paul R., 1980. "Take the money and run: A theory of voting in local referenda," Journal of Urban Economics, Elsevier, vol. 8(2), pages 187-195, September.
  6. John J. Siegfried & Andrew Zimbalist, 2000. "The Economics of Sports Facilities and Their Communities," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 95-114, Summer.
  7. Denice DiPasquale & Edward L. Glaeser, 1997. "Incentives and Social Capital: Are Homeowners Better Citizens?," Harvard Institute of Economic Research Working Papers 1815, Harvard - Institute of Economic Research.
  8. Brunner, Eric & Sonstelie, Jon, 2003. "Homeowners, property values, and the political economy of the school voucher," Journal of Urban Economics, Elsevier, vol. 54(2), pages 239-257, September.
  9. Coates, Dennis & Humphreys, Brad R., 2006. "Proximity benefits and voting on stadium and arena subsidies," Journal of Urban Economics, Elsevier, vol. 59(2), pages 285-299, March.
  10. Quigley, John M. & Smolensky, Eugene, 1997. "Stickball in San Francisco," Berkeley Program on Housing and Urban Policy, Working Paper Series qt3rw313m3, Berkeley Program on Housing and Urban Policy.
  11. Brueckner, Jan K. & Joo, Man-Soo, 1991. "Voting with capitalization," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 453-467, November.
  12. Craig A. Depken, II, 2000. "Fan Loyalty and Stadium Funding in Professional Baseball," Journal of Sports Economics, , vol. 1(2), pages 124-138, May.
  13. Carlino, Gerald & Coulson, N. Edward, 2004. "Compensating differentials and the social benefits of the NFL," Journal of Urban Economics, Elsevier, vol. 56(1), pages 25-50, July.
  14. Craig A. Depken, II, 2001. "Fan Loyalty in Professional Sports: An Extension to the National Football League," Journal of Sports Economics, , vol. 2(3), pages 275-284, August.
  15. Dennis Coates, 2006. "The Tax Benefits of Hosting the Super Bowl and the MLB All-Star Game: The Houston Experience," International Journal of Sport Finance, Fitness Information Technology, vol. 1(4), pages 239-252, November.
  16. Charles C. Tu, 2005. "How Does a New Sports Stadium Affect Housing Values? The Case of FedEx Field," Land Economics, University of Wisconsin Press, vol. 81(3).
  17. Coates, Dennis & Humphreys, Brad R. & Zimbalist, Andrew, 2006. "Compensating differentials and the social benefits of the NFL: A comment," Journal of Urban Economics, Elsevier, vol. 60(1), pages 124-131, July.
  18. Wildasin, David E., 1979. "Local public goods, property values, and local public choice," Journal of Urban Economics, Elsevier, vol. 6(4), pages 521-534, October.
  19. Oates, Wallace E, 1969. "The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 957-71, Nov./Dec..
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