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Local Public Expenditures and Housing Prices

Author

Listed:
  • Jaume García

    (Departament d'Economia i Empresa, Universitat Pompeu Fabra, Trias Farges 25-27, 08005 Barcelona, Spain, jaume.garcia@upf.edu)

  • Daniel Montolio

    (Departament d'Hisenda Pública and Institut d'Economia, Universitat de Barcelona, Av. Diagonal 690, Torre 4 Planta 2, 08034 Barcelona, Spain, montolio@ub.edu)

  • Josep Maria Raya

    (Departament d'Economia i Empresa, Universitat Pompeu Fabra, Trias Farges 25-27, 08005 Barcelona, Spain, josep.raya@upf.edu)

Abstract

This paper estimates a hedonic price model which makes it possible to determine how the price of a unit varies with the set of attributes it possesses, in the Spanish housing market. Concretely, and by means of capitalisation, hedonic price models can be used as an instrument to capture how local public expenditures influence housing prices and, by extension, how homeowners can indirectly receive benefit from local public investment. Using individual data for dwellings from the city of Barcelona (Spain) for the period 1998—2001, it is found that local policies aimed at enhancing the quality of life or the location-specific characteristic of the city of Barcelona have a positive impact on housing values.

Suggested Citation

  • Jaume García & Daniel Montolio & Josep Maria Raya, 2010. "Local Public Expenditures and Housing Prices," Urban Studies, Urban Studies Journal Limited, vol. 47(7), pages 1501-1512, June.
  • Handle: RePEc:sae:urbstu:v:47:y:2010:i:7:p:1501-1512
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Karolien De Bruyne & Jan Van Hove, 2013. "Explaining the spatial variation in housing prices: an economic geography approach," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1673-1689, May.
    2. Guglielmo Maria Caporale & Luis Gil-Alana, 2012. "Long Memory and Volatility Dynamics in the US Dollar Exchange Rate," Multinational Finance Journal, Multinational Finance Journal, vol. 16(1-2), pages 105-136, March - J.
    3. Carlos Pestana Barros & Zhongfei Chen & Luis A. Gil-Alana, 2012. "Housing sales in urban Beijing," Applied Economics, Taylor & Francis Journals, vol. 44(34), pages 4495-4504, December.
    4. Barros, Carlos Pestana & Gil-Alana, Luis A. & Chen, Zhongfei, 2014. "The housing market in Beijing and delays in sales: A fractional polynomial survival model," Economic Modelling, Elsevier, vol. 42(C), pages 296-300.
    5. Hourie, Eitan & Malul, Miki & Bar-El, Raphael, 2015. "The social value of municipal services," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 253-260.
    6. Paolo Buonanno & Daniel Montolio & Josep Raya-Vílchez, 2013. "Housing prices and crime perception," Empirical Economics, Springer, pages 305-321.

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