Valuing local collective goods: the case of business improvement districts
It is hard to find situations with localized public goods which lend themselves well to empirical study in economics. Business improvement districts (BIDs), for this reason, make for an interesting case study. BIDs are regions which use tax revenue to increase local amenity provision, in hopes of stimulating extra economic activity in the area. This paper examines how these amenities are capitalized into residential properties which overlap with, or reside near, these BIDs. Several findings emerge. First, homes within BIDs appear to appreciate more than homes within the rest of the DC area, following a BID’s anticipation or launch; this finding, however, is not robust to consideration of local price trends. Second, comparing homes within defined distances of BID borders suggests that homes within BIDs, following their anticipation or launch, do not appreciate more than their outside neighbors. Third, there is evidence of spillover effects. Homes closer to BIDs appreciate more than those further from such. Results suggest that positive externalities might not be solely confined to agents within a BID, but rather extend to its surrounding community.
|Date of creation:||03 Jun 2013|
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- Brooks, Leah, 2007.
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"Volunteering to be taxed: Business improvement districts and the extra-governmental provision of public safety,"
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- 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.
- Philip J. Cook & John MacDonald, 2011. "Public Safety through Private Action: an Economic Assessment of BIDS," Economic Journal, Royal Economic Society, vol. 121(552), pages 445-462, 05.
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- 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.
- 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.
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