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Unlocking Amenities: Estimating Public-Good Complementarity

David Albouy, Peter Christensen, Ignacio Sarmiento-Barbieri

NBER Working Paper No. 25107
Issued in September 2018, Revised in July 2019
NBER Program(s):Environment and Energy Economics, Public Economics

Public goods may exhibit complementarities that are essential for determining their individual value. Our results indicate that improving safety near parks can turn them from public bads to goods. Ignoring complementarities may lead to i) undervaluing the potential value of public goods; ii) overestimating heterogeneity in preferences; and iii) understating the value of public goods to minority households. Recent reductions in crime have “unlocked” $5 billion in property value in Chicago, New York and Philadelphia. Still over half of the potential value of park proximity, over $10 billion, remains locked in.

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Document Object Identifier (DOI): 10.3386/w25107

Published: David Albouy & Peter Christensen & Ignacio Sarmiento-Barbieri, 2020. "Unlocking amenities: Estimating public good complementarity," Journal of Public Economics, vol 182.

 
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