Edge Versus Center: Finding Common Ground in the Capitalization Debate

Posted: 25 Sep 2003

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

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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. Available at SSRN: https://ssrn.com/abstract=436680

David M. Brasington (Contact Author)

University of Cincinnati - Department of Economics ( email )

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Cincinnati, OH 45221-0211
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