Historic Buildings and Rehabilitation Expenditures: A Panel Data Approach

Abstract

Using a panel data set, a hedonic model is estimated to determine the characteristics of buildings that have influenced the market value assessments of a set of historic and non-historically designated buildings. Holding constant the characteristics of buildings, the findings indicate higher assessed values for some classes of historic buildings. Furthermore, using a two-stage Heckman sample selection model, the findings show that the expenditures on renovations contribute significantly to the change in assessed values of buildings, although less than might be expected. These and other results may be helpful in the design of cost effective rehabilitation strategies for historic preservation.

Keywords: historic buildings, rehabilitation, hedonic model, renovation

JEL Classification: L85,O00,O11,O12,O18,R11,R14,R33,R38,O23,R52