Empowerment Zones, Neighborhood Change and Owner Occupied Housing

Regional Science and Urban Economics (Impact Factor: 1.01). 07/2009; 39(4):386-396. DOI: 10.1016/j.regsciurbeco.2009.03.001
Source: RePEc


This paper examines the effects of a generous, spatially targeted economic development policy (the federal Empowerment Zone program) on local neighborhood characteristics and on the neighborhood quality of life, taking into account the interactions amongst the policy, changes in neighborhood demographics and neighborhood housing stock. Urban economic theory posits that housing prices in a small area should increase as quality of life increases, because people will be willing to pay more to live in the area, but these changes in prices and quality of life will also affect the demographics of the population through sorting and the housing stock through reinvestment. Using census block-group level data, we examine how housing prices respond to the Empowerment Zone policy intervention. Changes in the other dimensions of neighborhood quality (demographics and housing stock characteristics) will also help determine the total -- or full -- effect on housing values of the policy intervention. This paper estimates these direct and full effects in a simultaneous equations setting, compares direct and indirect effects and examines the robustness of the effects to alternate estimation strategies. We find strong evidence for substantively large and highly significant direct price effects, while results suggest that the indirect effects are substantively small or even negative.

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    • "At first glance, our results may appear counter-intuitive; we show that a policy designed to strengthen local economies causes a decline in the number of new small establishments and has a statistically unimportant effect on all new establishments. Although our IV estimates suggest the effect of the program is positive, the null OLS finding seems to fit with the existing evidence in Krupka and Noonan (2009) and Hanson (2009) that the EZ tax incentives are capitalized into local property values. If property values reflect immediate capitalization of the tax incentives by the marginal land purchase, new establishments considering locating in the targeted area may not be able to afford the increased rents. "
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    ABSTRACT: ABSTRACT This paper examines how offering tax incentives in a local area affects the entry of new business establishments. We use the federal Empowerment Zone (EZ) program as a natural experiment to test this relationship. Using instrumental variables estimation, we find that the EZ wage tax credit is responsible for attracting about 2.2 new establishments per 1,000 existing establishments, or a total of 20 new establishments in EZ areas. New establishment growth is strongest in the retail (about 40 new establishments) and service (about five new establishments) sectors, and offset by declines or slower growth in other industries.
    Full-text · Article · Jul 2011 · Journal of Regional Science
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    • "The workshops’ inclusive consensus-building allows groups to have a high degree of consciousness in relation to the decisions it makes. Several researchers have emphasized the importance of this method in assessing community empowerment domains [29,34,39,52]. "
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    ABSTRACT: Community empowerment approaches have been proven to be powerful tools for solving local health problems. However, the methods for measuring empowerment in the community remain unclear and open to dispute. This study aims to describe how a context-specific community empowerment measurement tool was developed and changes made to three health promotion programs in Rapla, Estonia. An empowerment expansion model was compiled and applied to three existing programs: Safe Community, Drug/HIV Prevention and Elderly Quality of Life. The consensus workshop method was used to create the measurement tool and collect data on the Organizational Domains of Community Empowerment (ODCE). The study demonstrated considerable increases in the ODCE among the community workgroup, which was initiated by community members and the municipality's decision-makers. The increase was within the workgroup, which had strong political and financial support on a national level but was not the community's priority. The program was initiated and implemented by the local community members, and continuous development still occurred, though at a reduced pace. The use of the empowerment expansion model has proven to be an applicable, relevant, simple and inexpensive tool for the evaluation of community empowerment.
    Full-text · Article · Mar 2011 · International Journal of Environmental Research and Public Health
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    • "Both the HUD and Busso and Kline estimation strategies rely on the assumption that EZ designation did not depend on the economic outcomes that an area would have experienced had it not been awarded EZ status (i.e. that EZ designation is exogenous). Krupka and Noonan (2009) use future recipients of EZs as a control group to determine the effects of first round EZs on local property values. "
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    ABSTRACT: The federal Empowerment Zone (EZ) program is a set of tax incentives targeted to areas of select cities. I estimate the effect of the EZ program on employment, poverty, and property values by comparing areas that received an EZ to areas that applied (and qualified), but were rejected. Because of endogeneity concerns, I use political representation to instrument for EZ designation. OLS results show a positive and statistically significant effect of the program on employment and poverty. IV estimates suggest the program had no effect on employment and poverty, and instead had a large statistically significant effect on property values.
    Preview · Article · Nov 2009 · Regional Science and Urban Economics
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