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An Empirical Study of Compensation Paid in Eminent Domain Settlements: New York City 1990 - 2002

42 Pages Posted: 14 Apr 2008 Last revised: 15 Jan 2011

Yun-chien Chang

Academia Sinica - Institutum Iurisprudentiae (IIAS)

Date Written: December 30, 2008

Abstract

No large-scale empirical study on condemnation compensation has been done in the past thirty years. Yet several state legislatures, in response to the Kelo case, have changed laws to increase condemnation compensation, despite the lack of empirical grounds. To fill in the empirical gap, I use hedonic regression models and about 8''8000 sales to estimate the fair market value (FMV) of condemned properties whose owners reached compensation settlements with the condemnor, New York City, between 1990 and 2002. More than 50% of these condemnees were compensated with less than FMV; about 40% received more than FMV; and less than 10% got FMV. Owners of residential properties and non-residential properties alike often received extreme compensations that are less than 50%, or more than 150%, of FMV. Condemnor''s political interests and condemnees'' ignorance of estimated FMV are the most likely explanations. Compensation level does not correlate with any factor with available data.

Keywords: Compensation, eminent domain settlement, fair market value, hedonic regression model, New York City

JEL Classification: K11

Suggested Citation

Chang, Yun-chien, An Empirical Study of Compensation Paid in Eminent Domain Settlements: New York City 1990 - 2002 (December 30, 2008). Journal of Legal Studies, Vol. 39, pp. 201-244, 2010; 3rd Annual Conference on Empirical Legal Studies Paper; NYU Law and Economics Research Paper No. 08-52. Available at SSRN: https://ssrn.com/abstract=1120072

Yun-chien Chang (Contact Author)

Academia Sinica - Institutum Iurisprudentiae (IIAS) ( email )

128 Academia Sinica Rd., Sec. 2
Nankang
Taipei City, 11529
Taiwan

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