Edge Versus Center: Finding Common Ground in the Capitalization Debate

32 Pages Posted: 25 Sep 2003

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 30, 2002

Abstract

A continuing debate questions whether capitalization of taxes and public services into house price occurs. The current study argues for an inverse relationship between housing supply elasticity and capitalization rates. A sample is split into houses on the interior and edge of the urban area. Capitalization of schooling and crime occurs everywhere, but it is weaker toward the edge of an urban area where housing supply elasticities and developer activity are greater. Tax results are less robust, but the capitalization rates of crime and school quality are roughly twice as strong on the interior than on the urban fringe.

Keywords: capitalization, house price hedonic, local public goods, education, crime, taxes

JEL Classification: H40, R31, R21

Suggested Citation

Brasington, David M., Edge Versus Center: Finding Common Ground in the Capitalization Debate (May 30, 2002). Available at SSRN: https://ssrn.com/abstract=424168 or http://dx.doi.org/10.2139/ssrn.424168

David M. Brasington (Contact Author)

University of Cincinnati - Department of Economics ( email )

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Cincinnati, OH 45221-0211
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