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.
Original language | English (US) |
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Pages (from-to) | 71-82 |
Number of pages | 12 |
Journal | Journal of Urban Economics |
Volume | 76 |
Issue number | 1 |
DOIs | |
State | Published - Jul 2013 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Urban Studies
Keywords
- Housing prices
- Local public goods
- Suburbanization
- Willingness to pay