A Direct Test of the Homevoter Hypothesis

38 Pages Posted: 22 Jun 2007 Last revised: 21 May 2012

See all articles by Carolyn A. Dehring

Carolyn A. Dehring

University of Georgia - Department of Insurance, Legal Studies, Real Estate

Craig A. Depken

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Date Written: May 21, 2012

Abstract

We propose a methodology that facilitates a direct test of the homevoter hypothesis, which posits that homeowners vote in favor of public projects they perceive increase residential property values and against those that do not. First, we estimate how pre-referendum events that signal a higher probability that the public project will be undertaken impact local residential property values before the referendum is held. These pre-referendum impacts are considered noisy signals to homeowners about the market’s assessment of the net marginal benefits of the project. Second, we aggregate these market signals to the precinct level and relate them to precinct-level voting results concerning the proposed project. We apply this two-step approach to the 2004 referendum in Arlington, Texas, for a publicly subsidized stadium for the NFL Dallas Cowboys. The analysis supports the homevoter hypothesis and establishes a possible methodology for future evaluations in this small but growing empirical literature.

Keywords: stadiums, sports economics, hedonic model

JEL Classification: R58, H71, L83

Suggested Citation

Dehring, Carolyn A. and Depken, Craig A. and Ward, Michael Robert, A Direct Test of the Homevoter Hypothesis (May 21, 2012). Journal of Urban Economics, Volume 64, Issue 1, July 2008, Pages 155–170, Available at SSRN: https://ssrn.com/abstract=993246

Carolyn A. Dehring (Contact Author)

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6255
United States
706-542-3809 (Phone)

Craig A. Depken

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics ( email )

Charlotte, NC 28223
United States

Michael Robert Ward

University of Texas at Arlington - College of Business Administration - Department of Economics ( email )

330 Business Building
Box 19479
Arlington, TX 76019
United States
817-272-3090 (Phone)
817-272-3145 (Fax)

ZEW, Mannheim ( email )

D-68034 Mannheim
Germany

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