Local public goods and the demand for high-income municipalities

Leah Boustan

Journal of Urban Economics, 2013, vol. 76, issue C, 71-82

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.

Keywords: Suburbanization; Housing prices; Willingness to pay; Local public goods (search for similar items in EconPapers)
JEL-codes: H41 H73 R21 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:76:y:2013:i:c:p:71-82

DOI: 10.1016/j.jue.2013.02.003

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