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Escape from the City? The Role of Race, Income, and Local Public Goods in Post-War Suburbanization

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  • Leah Platt Boustan

Abstract

Affluent towns often deliver high-quality public services to their residents. I estimate the willingness to pay to live in a high-income suburb, above and beyond the demand of wealthy neighbors, by measuring changes in housing prices across city-suburban borders as the income disparity between the two municipalities changes over time. I find that a $10,000 increase in town-level median income is associated with a seven percent increase in housing values at the border. The estimated demand for high-income municipalities is primarily driven by school quality and lower property tax rates.

Suggested Citation

  • Leah Platt Boustan, 2007. "Escape from the City? The Role of Race, Income, and Local Public Goods in Post-War Suburbanization," NBER Working Papers 13311, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13311 Note: DAE
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    References listed on IDEAS

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    1. Barrow, Lisa & Rouse, Cecilia Elena, 2004. "Using market valuation to assess public school spending," Journal of Public Economics, Elsevier, pages 1747-1769.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
    3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    4. Leah Platt Boustan, 2010. "Was Postwar Suburbanization "White Flight"? Evidence from the Black Migration," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 417-443.
    5. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, pages 645-681.
    6. Leah Platt Boustan, 2012. "School Desegregation and Urban Change: Evidence from City Boundaries," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 85-108, January.
    7. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 376-424, April.
    8. Barrow, Lisa & Rouse, Cecilia Elena, 2004. "Using market valuation to assess public school spending," Journal of Public Economics, Elsevier, pages 1747-1769.
    9. 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.
    10. Buchanan, James M. & Goetz, Charles J., 1972. "Efficiency limits of fiscal mobility: An assessment of the tiebout model," Journal of Public Economics, Elsevier, pages 25-43.
    11. Calabrese, Stephen & Epple, Dennis & Romer, Thomas & Sieg, Holger, 2006. "Local public good provision: Voting, peer effects, and mobility," Journal of Public Economics, Elsevier, pages 959-981.
    12. Ellickson, Bryan, 1971. "Jurisdictional Fragmentation and Residential Choice," American Economic Review, American Economic Association, vol. 61(2), pages 334-339, May.
    13. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
    14. Calabrese, Stephen & Epple, Dennis & Romer, Thomas & Sieg, Holger, 2005. "Local Public Good Provision: Voting, Peer Effects, and Mobility," Papers 10-04-2005, Princeton University, Research Program in Political Economy.
    15. Stephen Calabrese & Dennis Epple & Thomas Romer & Holger Sieg, "undated". "Local Public Good Provision: Voting, Peer Effects, and Mobility," GSIA Working Papers 2005-E54, Carnegie Mellon University, Tepper School of Business.
    16. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 775-805.
    17. Calabrese, Stephen & Epple, Dennis & Romer, Thomas & Sieg, Holger, 2006. "Local public good provision: Voting, peer effects, and mobility," Journal of Public Economics, Elsevier, pages 959-981.
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    Cited by:

    1. Leah Platt Boustan, 2012. "School Desegregation and Urban Change: Evidence from City Boundaries," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 85-108, January.
    2. Leah Boustan & Allison Shertzer, 2013. "Population Trends as a Counterweight to Central City Decline, 1950–2000," Demography, Springer;Population Association of America (PAA), vol. 50(1), pages 125-147, February.
    3. Leah Platt Boustan, 2007. "Was Postwar Suburbanization "White Flight"? Evidence from the Black Migration," NBER Working Papers 13543, National Bureau of Economic Research, Inc.
    4. Leah Platt Boustan & Allison Shertzer, 2010. "Demography and Population Loss from Central Cities, 1950-2000," NBER Working Papers 16435, National Bureau of Economic Research, Inc.
    5. Kahn, Matthew E. & Vaughn, Ryan & Zasloff, Jonathan, 2010. "The housing market effects of discrete land use regulations: Evidence from the California coastal boundary zone," Journal of Housing Economics, Elsevier, vol. 19(4), pages 269-279, December.

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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