Place-based policies and the housing market

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Abstract

—We study the economic effects of place-based policies in the housing market, by investigating the effects of a place-based program on prices of surrounding owner-occupied properties. The program improved the quality of public housing in 83 impoverished neighborhoods through-out the Netherlands. We combine a first-difference approach with a fuzzy regression-discontinuity design to address the fundamental issue that these neighborhoods are endogenously treated. Improvements in public housing induced surrounding housing prices to increase by 3.5%. The program’s external benefits are sizable and at least half of the value of investments in public housing.

Original languageEnglish
Pages (from-to)400-414
Number of pages15
JournalReview of Economics and Statistics
Volume101
Issue number3
Early online date28 Jun 2019
DOIs
Publication statusPublished - Jul 2019

Funding

This work has benefited from a VENI research grant from the Netherlands Organisation for Scientific Research. We thank anonymous referees and the editor Bryan Graham for useful comments and NVM, ABF Research and Statistics Netherlands for providing data. We further thank Fe-lipe Carozzi, Nicolás González-Pampillón, Patrick Kline, Henry Overman, Jens Suedekum, Arno van der Vlist, Maximilian von Ehrlich, and the seminar audiences in Amsterdam, Barcelona, Chiba, Copenhagen, Düsseldorf, Istanbul, Palermo, Tokyo, Venice, and Washington, DC, for constructive comments. The article was prepared within the framework of the HSE University Basic Research Program funded by the Russian Academic Excellence Project ‘5-100’.

FundersFunder number
Nederlandse Organisatie voor Wetenschappelijk Onderzoek
National Research University Higher School of Economics

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