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Unlocking amenities: Estimating public good complementarity

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  • Albouy, David
  • Christensen, Peter
  • Sarmiento-Barbieri, Ignacio

Abstract

Public goods may exhibit complementarities that are essential for determining their individual value. Our results indicate that improving safety near parks can turn them from public bads to goods. Ignoring complementarities may lead to i) undervaluing the potential value of public goods; ii) overestimating heterogeneity in preferences; and iii) understating the value of public goods to minority households. Recent reductions in crime have “unlocked” almost $7 billion in property value in Chicago, New York and Philadelphia. Still, two-fifths of the potential value of park proximity, $10 billion, remains locked-in.

Suggested Citation

  • Albouy, David & Christensen, Peter & Sarmiento-Barbieri, Ignacio, 2020. "Unlocking amenities: Estimating public good complementarity," Journal of Public Economics, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:pubeco:v:182:y:2020:i:c:s0047272719301720
    DOI: 10.1016/j.jpubeco.2019.104110
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    3. Ross Hickey & Steeve Mongrain & Joanne Roberts & Tanguy van Ypersele, 2021. "Private protection and public policing," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(1), pages 5-28, February.
    4. Zhaoyang Liu & Heqing Huang & Juha Siikamäki & Jintao Xu, 2024. "Area-Based Hedonic Pricing of Urban Green Amenities in Beijing: A Spatial Piecewise Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(5), pages 1223-1248, May.
    5. Bieri, David S. & Kuminoff, Nicolai V. & Pope, Jaren C., 2023. "National expenditures on local amenities," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    6. Malik, Khyati & Kim, Sowon & Cultice, Brian J., 2023. "The impact of remote work on green space values in regional housing markets," Journal of Housing Economics, Elsevier, vol. 62(C).
    7. Brian Beach & Daniel B. Jones & Tate Twinam & Randall Walsh, 2018. "Minority Representation in Local Government," NBER Working Papers 25192, National Bureau of Economic Research, Inc.
    8. Su, Yichen, 2022. "Measuring the Value of Urban Consumption Amenities: A Time-Use Approach," Journal of Urban Economics, Elsevier, vol. 132(C).
    9. Cassidy, Alecia & Meeks, Robyn C. & Moore, Michael R., 2023. "Cleaning up the Great Lakes: Housing market impacts of removing legacy pollutants," Journal of Public Economics, Elsevier, vol. 226(C).
    10. Brent, Daniel & Beland, Louis-Philippe, 2020. "Traffic congestion, transportation policies, and the performance of first responders," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    11. Su, Yichen, 2022. "Measuring the Value of Urban Consumption Amenities: A Time-Use Approach," MPRA Paper 113158, University Library of Munich, Germany.
    12. Ikuto Aiba & Yasuhiro Sato, 2020. "A Theory of Public Goods under Complementarity between Safety and Consumptions," CIRJE F-Series CIRJE-F-1150, CIRJE, Faculty of Economics, University of Tokyo.
    13. Albouy, David & Farahani, Arash & Kim, Heejin, 2018. "Productivity and Quality-of-Life Benefits to Rural Infrastructure," Issue Reports 277657, Farm Foundation.
    14. Ellen, Ingrid Gould & Horn, Keren Mertens & Reed, Davin, 2019. "Has falling crime invited gentrification?," Journal of Housing Economics, Elsevier, vol. 46(C).
    15. Liu, Lu & Meng, Lina & Zhang, Ruige, 2024. "Does Easy Accessibility to Urban Parks Always Raise Home Values?," Journal of Housing Economics, Elsevier, vol. 63(C).
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    More about this item

    Keywords

    Public goods; Complements; Amenities; Crime; Environmental amenities; Parks; Urban development;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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