Decision to Make a HOA: Does Collective Action Paradox Matter?

14 Pages Posted: 12 Oct 2013 Last revised: 30 Dec 2013

Date Written: December 2013

Abstract

Ability to make collective agreements determines life of many organizations. But does it matter for the decision to make a new organization? On the data of 82 homeowners associations (HOAs) in Moscow and Perm factors that underpin HOA formation are studied. A logit-regression analysis is used. Ability of tenants to resolve the collective action problem in operating housing infrastructure shows its importance along with the physical characteristics of an apartment building. Thus HOA formation by homeowners is a signal of their ability to manage a house. Collective action paradox begins to play role not only ex post, but also ex ante, prior to organization’s establishment.

Keywords: homeowners associations, social capital, collective action problem, housing and communal services reform

JEL Classification: C35, P29, D71

Suggested Citation

Borisova, Ekaterina, Decision to Make a HOA: Does Collective Action Paradox Matter? (December 2013). Available at SSRN: https://ssrn.com/abstract=2339148 or http://dx.doi.org/10.2139/ssrn.2339148

Ekaterina Borisova (Contact Author)

University of Lille ( email )

Cité Scientifique
Villeneuve-d'Ascq, 59650
France

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