Maintaining Public Goods: The Capitalized Value of Local Park Renovations

This study provides new evidence of the capitalized value of local parks by estimating the impact on surrounding home prices associated with renovations of specific local park attributes. These results shed light on an empirical puzzle in the existing literature that single-family residential homeow...

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Bibliographic Details
Published in:Land economics 2016-02, Vol.92 (1), p.96-116
Main Authors: Livy, Mitchell R., Klaiber, H. Allen
Format: Article
Language:English
Subjects:
Capitalization
Economic models
Housing prices
Parks & recreation areas
Public good
Public goods
Renovation & restoration
Studies
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Summary:This study provides new evidence of the capitalized value of local parks by estimating the impact on surrounding home prices associated with renovations of specific local park attributes. These results shed light on an empirical puzzle in the existing literature that single-family residential homeowners have a surprisingly low valuation associated with living in close proximity to local parks. Using property fixed effects models with time-varying renovations data, we disaggregate the bundle of amenities comprising local parks and find that the capitalization of renovations is heterogeneous and depends on the specific park attributes undergoing renovation.
ISSN:0023-7639
1543-8325
DOI:10.3368/le.92.1.96