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A direct test of the homevoter hypothesis

  • Dehring, Carolyn A.
  • Depken II, Craig A.
  • Ward, Michael R.

We propose a methodology that facilitates a direct test of the homevoter hypothesis, which posits that homeowners vote in favor of public projects they perceive increase residential property values and against those that do not. First, we estimate how pre-referendum events that signal a higher probability that the public project will be undertaken impact local residential property values before the referendum is held. These pre-referendum 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 two-step approach to the 2004 referendum in Arlington, Texas, for a publicly subsidized stadium for 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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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 64 (2008)
Issue (Month): 1 (July)
Pages: 155-170

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Handle: RePEc:eee:juecon:v:64:y:2008:i:1:p:155-170
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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  1. 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.
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  3. 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).
  4. 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.
  5. Dehring, Carolyn A. & Depken II, Craig A. & Ward, Michael R., 2008. "A direct test of the homevoter hypothesis," Journal of Urban Economics, Elsevier, vol. 64(1), pages 155-170, July.
  6. Murphy, Kevin M & Topel, Robert H, 1985. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 370-79, October.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. Denise DiPasquale & Edward L. Glaeser, 1998. "Incentives and Social Capital: Are Homeowners Better Citizens?," NBER Working Papers 6363, National Bureau of Economic Research, Inc.
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  15. Craig A. Depken II, 2000. "Fan Loyalty and Stadium Funding in Professional Baseball," Journal of Sports Economics, , vol. 1(2), pages 124-138, May.
  16. Dennis Coates & Craig A. Depken, II, 2006. "Mega-Events: Is the Texas-Baylor game to Waco what the Super Bowl is to Houston?," Working Papers 0606, International Association of Sports Economists;North American Association of Sports Economists.
  17. 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..
  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. 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.
  20. Carlino, Gerald & Coulson, N. Edward, 2006. "Compensating differentials and the social benefit of the NFL: Reply," Journal of Urban Economics, Elsevier, vol. 60(1), pages 132-138, July.
  21. 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.
  22. 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.
  23. Gerald Carlino & N. Edward Coulson, 2002. "Compensating differentials and the social benefits of the NFL," Working Papers 02-12, Federal Reserve Bank of Philadelphia.
  24. 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.
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