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Unveiling Hidden Districts: Assessing the Adoption Patterns of Business Improvement Districts in California

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  • Brooks, Leah

Abstract

I use the results of a survey on the adoption patterns of Business Improvement Districts (BIDs) in the state of California to begin filling a gap in our understanding of the role and prominence of the broader class of special assessment districts. A BID is formed when a majority of merchants or property owners in a commercial neighborhood votes in favor of a package of local taxes and expenditures; once passed, assessments are legally binding on all members of the commercial neighborhood. I find that roughly half of all larger cities in California have at least one BID; among the universe of cities in four Southern California counties, that figure falls to about one–fifth. I combine the survey data with demographic, institutional and political data and find that BID adoption modestly increases in residential heterogeneity and more strongly decreases in a city's year of incorporation, which I interpret as a measure of the importance of the collective action problem in older commercial neighborhoods.

Suggested Citation

  • Brooks, Leah, 2007. "Unveiling Hidden Districts: Assessing the Adoption Patterns of Business Improvement Districts in California," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(1), pages 5-24, March.
  • Handle: RePEc:ntj:journl:v:60:y:2007:i:1:p:5-24
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    References listed on IDEAS

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    1. repec:hrv:faseco:4553034 is not listed on IDEAS
    2. Leah Brooks, 2006. "Volunteering To Be Taxed: Business Improvement Districts And The Extra-Governmental Provision Of Public Safety," Departmental Working Papers 2006-04, McGill University, Department of Economics.
    3. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
    4. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    5. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    6. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    7. Leah Brooks, 2006. "Does Spatial Variation in Heterogeneity Matter? Assessing the Adoption Patterns of Business Improvement Districts," Review of Policy Research, Policy Studies Organization, vol. 23(6), pages 1219-1234, November.
    8. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
    9. Eric D. Gould & B. Peter Pashigian & Canice J. Prendergast, 2005. "Contracts, Externalities, and Incentives in Shopping Malls," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 411-422, August.
    10. Helsley, Robert W. & Strange, William C., 1999. "Gated Communities and the Economic Geography of Crime," Journal of Urban Economics, Elsevier, vol. 46(1), pages 80-105, July.
    11. Nora Gordon & Brian Knight, 2006. "The Causes of Political Integration: An Application to School Districts," NBER Working Papers 12047, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Meltzer, Rachel, 2012. "Understanding Business Improvement District formation: An analysis of neighborhoods and boundaries," Journal of Urban Economics, Elsevier, vol. 71(1), pages 66-78.
    2. Jonathan B. Justice & Chris Skelcher, 2009. "Analysing Democracy in Third-Party Government: Business Improvement Districts in the US and UK," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(3), pages 738-753, September.
    3. Leah Brooks, 2006. "Volunteering To Be Taxed: Business Improvement Districts And The Extra-Governmental Provision Of Public Safety," Departmental Working Papers 2006-04, McGill University, Department of Economics.
    4. Miller, Mark V., 2013. "Valuing local collective goods: the case of business improvement districts," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150635, Agricultural and Applied Economics Association.
    5. Brooks, Leah, 2008. "Volunteering to be taxed: Business improvement districts and the extra-governmental provision of public safety," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 388-406, February.
    6. Cheung, Ron, 2008. "The interaction between public and private governments: An empirical analysis," Journal of Urban Economics, Elsevier, vol. 63(3), pages 885-901, May.
    7. repec:spr:ecogov:v:19:y:2018:i:1:d:10.1007_s10101-017-0198-4 is not listed on IDEAS
    8. Brooks, Leah & Strange, William C., 2011. "The micro-empirics of collective action: The case of business improvement districts," Journal of Public Economics, Elsevier, vol. 95(11), pages 1358-1372.

    More about this item

    JEL classification:

    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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