DO CAPITALIZATION EFFECTS FOR PUBLIC GOODS REVEAL THE PUBLIC'S WILLINGNESS TO PAY?

• 成果类型: Article
• 署名作者: Kuminoff, Nicolai V.; Pope, Jaren C.
• 署名单位: Arizona State University; Arizona State University-Tempe; Brigham Young University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12088
• 发表日期: 2014
• 页码: 1227-1250
• 关键词: estimating equilibrium-models; property-values; hedonic prices; tiebout bias; house prices; benefits; schools; demand; matter; crime

摘要

This article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets. We extend Rosen's hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities. The model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these capitalization effects and welfare changes. We test this hypothesis in the context of changes in measures of school quality in five metropolitan areas. Results from boundary discontinuity designs suggest that capitalization effects understate parents' willingness to pay for public school improvements by as much as 75%.