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Housing market prices: capitalisation of efficiency in local public service provision. An application with data on Italian urban transport related expenditures

Angela Bergantino and Francesco Porcelli ()

No 47, SERIES from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: This paper investigates, from both a theoretical and an empirical point of view, the relationship between local government efficiency and the local housing market and, in particular, the possi- bility that councils’ performance is capitalised in the price of housing. The theoretical analysis is developed within a classical †Tiebout framework†using a simple model of urban political economy, showing the mechanism through which local government efficiency is capitalised in the value of houses. The empirical analysis, based on data from Italian municipalities, provides robust evidence in support of the hypothesis of positive capitalisation.

Keywords: housevalues; urbantransport; efficiency; municipalities; capitalisation (search for similar items in EconPapers)
JEL-codes: D31 D63 D71 (search for similar items in EconPapers)
Date: 2013-08, Revised 2013-08
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