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Housing market prices: capitalisation of efficiency in local public service provision. An application with data on Italian urban transport related expenditures

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  • Angela S. Bergantino

    (University of Bari (Italy))

  • Francesco Porcelli

    (University of Warwick (England) and University of Bari (Italy))

Abstract

This paper investigates, from both a theoretical and an empirical point of view, the relationship between local government efficiency and the local housing market and, in particular, the possi- bility that councils’ performance is capitalised in the price of housing. The theoretical analysis is developed within a classical †Tiebout framework†using a simple model of urban political economy, showing the mechanism through which local government efficiency is capitalised in the value of houses. The empirical analysis, based on data from Italian municipalities, provides robust evidence in support of the hypothesis of positive capitalisation.

Suggested Citation

  • Angela S. Bergantino & Francesco Porcelli, 2013. "Housing market prices: capitalisation of efficiency in local public service provision. An application with data on Italian urban transport related expenditures," SERIES 0047, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Aug 2013.
    • Handle: RePEc:bai:series:economia-series47
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    More about this item

    Keywords

    housevalues; urbantransport; efficiency; municipalities; capitalisation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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