IDEAS home Printed from https://ideas.repec.org/h/spr/adschp/978-3-031-92699-0_6.html
   My bibliography  Save this book chapter

The Wizard of OZ (Opportunity Zones): Spatial Spillovers in Place-Based Programs

In: Seven Decades of Econometrics and Beyond

Author

Listed:
  • Dibya Deepta Mishra

    (Rice University)

  • Robin C. Sickles

    (Rice University)

  • Yanfei Sun

    (Toronto Metropolitan University)

Abstract

The Opportunity Zones (OZ) program, as the largest ongoing place-based development program in the U.S., was intended to stimulate investment and drive economic growth in low-income areas by lowering capital gains tax rates. This paper investigates the spatial spillover effects of the OZ due to their interconnections with high-income neighboring areas. Using two-way fixed effects, synthetic difference in-differences, and spatial difference-in-differences, we study the impact of OZ on housing prices and nighttime light emissions in the largest state by area in the continental US, Texas. Our empirical results indicate that census tracts located near more developed regions exhibit a stronger response to the OZ program due to the presence of spillover effects. One of the governing factors of these policies is the number of high-income neighbors. However, they play the role of a double-edged sword. A large number of high-income neighbors will make the tract in question not as attractive for investment, even in the presence of tax breaks. This is because the neighbors will provide higher returns. If a census tract is surrounded by some high-income neighbors and there is scope of future return, it may provide incentives for investing. We provide evidence of this trade-off in our paper and also show how these effects should be considered carefully when designing place-based policies, especially when providing location-based tax breaks as in the Opportunity Zone program.

Suggested Citation

  • Dibya Deepta Mishra & Robin C. Sickles & Yanfei Sun, 2025. "The Wizard of OZ (Opportunity Zones): Spatial Spillovers in Place-Based Programs," Advanced Studies in Theoretical and Applied Econometrics, in: Badi H. Baltagi & László Mátyás (ed.), Seven Decades of Econometrics and Beyond, pages 181-208, Springer.
  • Handle: RePEc:spr:adschp:978-3-031-92699-0_6
    DOI: 10.1007/978-3-031-92699-0_6
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:adschp:978-3-031-92699-0_6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.