Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149522
Authors: 
Koster, Hans R.A.
van Ommeren, Jos
Year of Publication: 
2017
Series/Report no.: 
Tinbergen Institute Discussion Paper 17-008/VIII
Abstract: 
We study the economic effects of place-based policies in the housing market taking into account search frictions. Theory indicates that beneficial policies increase house prices, but temporarily reduce sales times of owner-occupied properties. We investigate both effects for a place-based programme that improved public housing in 83 impoverished neighbourhoods throughout the Netherlands. We combine a first-difference approach with a fuzzy regression-discontinuity design to address the fundamental issue that these neighbourhoods are endogenously treated. Place-based policies increase house prices with 3.5 percent and, in line with theory, temporarily reduce sales times with 20 percent. The sales time effect dissipates within 7.5 years. The programme’s welfare benefits to homeowners are sizeable and at least half of the value of investments in public housing.
Subjects: 
amenities
housing market
search frictions
house price
sales time
place-based policies
JEL: 
R30
R33
R38
Document Type: 
Working Paper

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