Assessing the Economic Value of Neighborhood Self-Governance
37 Pages Posted: 27 Aug 2013
Date Written: 2013
Abstract
Much recent literature suggests that promoting social capital and neighborhood organization may be an effective means to stabilize and improve quality of life in some urban neighborhoods (e.g. Sampson 2012). This paper analyzes a hedonic price model of sales prices of residential property in the city of Little Rock from 2007 – 2012 using geocoded data obtained from the Pulaski County tax assessor’s office. We use this model to test for the impact of three types of neighborhood governance on property values: an active homeowners’ association, an active voluntary neighborhood association, and no formal governance. We find no evidence that either voluntary neighborhood associations or property owners associations increase property values. This could indicate that these institutional forms lack institutional robustness compared to governmental arrangements for serving neighborhoods. In particular, in some cities the boundaries for these associations may not correspond to the boundaries relevant to homeowners and homebuyers.
Keywords: Neighborhood organization, capitalization, hedonic model
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