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LOCAL PUBLIC GOODS AND RESIDENTIAL PROPERTY VALUES: SOME INSIGHTS AND EXTENSIONS

This study is concerned with the estimation of stochastic models explaining residential property values that incorporate house characteristics, neighborhood and community characteristics, and nonexpenditure measures of specific local public goods. By considering four primary services instead of a single local service, or a single surrogate for all local services, it is possible to test the hypothesis that there exist positive relationships between specific local public goods and residential property values. The empirical results indicate a significant response by households to differences in the availability of public goods. However, though household decisions concerning where to locate are influenced by the availability of public goods, it is not apparent that all local services affect this decision to the same degree.