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Using survey data to study capitalization of local public services

  • Fredrik Carlsen

    ()

    (Department of Economics, Norwegian University of Science and Technology)

  • Jørn Rattsø

    ()

    (Department of Economics, Norwegian University of Science and Technology)

  • Bjørg Langset

    (Research Department, Statistics Norway)

  • Lasse Stambøl

    (Research Department, Statistics Norway)

We use surveys in which respondents evaluate local amenities in Norway to compute proxy variables for the quality of local public services as well as other local amenities relevant to location decisions. Average satisfaction reported by the respondents is computed for each amenity and each municipality, adjusted for sample variation in personal characteristics and included as explanatory variables in a cross-section study of house prices. We find that house prices are increasing in satisfaction with health care, cultural activities and public transportation, suggesting that the quality of local public services indeed affects the attractiveness of a residential site. When the analysis is repeated with input measures of service levels instead of satisfaction variables, we find no effects of local public services on house prices, indicating that traditional Tiebout studies based on input measures may have underestimated the importance of local public services for location decisions.

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File URL: http://www.svt.ntnu.no/iso/WP/2006/17amenities_houseprices.pdf
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Paper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 8106.

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Length: 24 pages
Date of creation: 18 May 2006
Date of revision:
Handle: RePEc:nst:samfok:8106
Contact details of provider: Postal: 7491 Trondheim
Phone: 73 59 19 40
Fax: 73 59 69 54
Web page: http://www.svt.ntnu.no/iso/WP/wp.htm
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