TY  - JOUR
AU  - Rossi-Hansberg,Esteban
AU  - Sarte,Pierre-Daniel
AU  - Owens,Raymond,III
TI  - Housing Externalities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14369
PY  - 2008
Y2  - September 2008
UR  - http://www.nber.org/papers/w14369
L1  - http://www.nber.org/papers/w14369.pdf
N1  - Author contact info:
Esteban Rossi-Hansberg
Princeton University
Department of Economics
Fisher Hall
Princeton, NJ 08544-1021
Tel: 609/2584024
Fax: 650/725-5702
E-Mail: erossi@princeton.edu

Pierre-Daniel Sarte
Research Department.
Federal Reserve Bank of Richmond
PO Box 27622
Richmond, VA  23261
Tel: 804-697-8210
Fax: 804-697-8255
E-Mail: pierre.sarte@rich.frb.org

Raymond Owens
Research Department.
Federal Reserve Bank of Richmond
PO Box 27622
Richmond, VA  23261
E-Mail: raymond.owens@rich.frb.org
AB  - Using data compiled from concentrated residential urban revitalization programs implemented in Richmond, VA, between 1999 and 2004, we study residential externalities. Specifically, we provide evidence that in neighborhoods targeted by the programs, sites that did not directly benefit from capital improvements nevertheless experienced considerable increases in land value relative to similar sites in a control neighborhood. Within the targeted neighborhoods, increases in land value are consistent with externalities that fall exponentially with distance. In particular, we estimate that housing externalities decrease by half approximately every 990 feet. On average, land prices in neighborhoods targeted for revitalization rose by 2 to 5 percent at an annual rate above those in the control neighborhood. These increases translate into land value gains of between $2 and $6 per dollar invested in the program over a six-year period. We provide a simple theory that helps us interpret and estimate these effects.
ER  -