|Title||Essays on the Impact of Local Government Policy on Cities and Land Markets|
This dissertation consists of three essays that look at the impact of local government policy on cities and land markets. The first essay examines the effect of differences in anti-crime policy on the spatial distribution of crime and the off-setting of the state policy by local governments. The second essay considers how differences in crime rates affect the sorting of businesses within an urban area. The third essay analyzes how housing vouchers affect the neighborhood quality of low-income households. The first essay considers two related questions: the impact of spatial variation in crime prevention policies on the migration of criminal activity into nearby locations and the tendency for higher-level government anti-crime policies to be offset by a scaling back of local crime deterrent efforts. The key source of variation used for identification is differences in the timing of adoption of state-wide Truth-in-Sentencing TIS) legislation. To estimate the effect of the policy, I compare activity in adjacent counties on opposite sides of state boundaries in the 59 urban areas that cross state lines. There are three key results. First, adoption of TIS lowers the level of criminal activity in the adopting state. Second, adoption of the stiffer sentencing policy prompts migration of criminal activity into adjacent counties in the neighboring state. Finally, after imposition of TIS by the state government, local governments reduce the level of police protection. This suggests that some of the deterrent effect of the policy is offset by a scaling back on anti-crime efforts at the local level. The second essay estimates the impact of violent crime on the location of business activity in five U.S. cities. Central to the analysis is the idea that different sectors of the economy will sort into high- and low-crime areas depending on their relative sensitivity to crime. We illustrate this by comparing retail industries to their wholesale counterparts, and high-end restaurants to low-end eateries. Because retail industries are dependent on pedestrian shoppers, they are expected to be more sensitive to violent crime. Because high-end restaurants are dependent on evening business, they are expected to be more sensitive to violent crime over the prime dinner hours. We find that retailers are more likely to locate in safer locations compared to wholesalers in the same industry. Among restaurants, an increase in violent crime during the prime dinner hours decreases the high-end share of local restaurants. These findings indicate that entrepreneurs take violent crime into account when bidding for locations within a city. The third essay examines the effect of receiving a housing voucher on the residential mobility and neighborhood attributes of low-income households. Federal housing policy has shifted towards vouchers in lieu of public housing projects, in part, to allow households to move away from high poverty areas. Prior research, however, has found little evidence that households voluntarily move away from such locations. Drawing upon an exogenous shock to the supply of vouchers and an instrumental variables strategy, we use confidential administrative records and find that voucher recipients were located in neighborhoods with a 16% lower poverty rate as compared to non-recipients. In addition, we find voucher recipients were 33 percentage points more likely than non-recipients to move across census tract boundaries each quarter. These estimates are larger in magnitude than earlier studies that did not have a plausible instrumental variable to address the endogenous receipt of a housing subsidy.
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