Local public goods and the demand for high-income municipalities

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20 Scopus citations


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 languageEnglish (US)
Pages (from-to)71-82
Number of pages12
JournalJournal of Urban Economics
Issue number1
StatePublished - Jul 2013
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies


  • Housing prices
  • Local public goods
  • Suburbanization
  • Willingness to pay


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