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Abstract
It is hard to find situations with localized public goods which lend themselves well to
empirical study in economics. Business improvement districts (BIDs), for this reason, make
for an interesting case study. BIDs are regions which use tax revenue to increase local
amenity provision, in hopes of stimulating extra economic activity in the area. This paper
examines how these amenities are capitalized into residential properties which overlap with,
or reside near, these BIDs. Several findings emerge. First, homes within BIDs appear to
appreciate more than homes within the rest of the DC area, following a BID’s anticipation
or launch; this finding, however, is not robust to consideration of local price trends. Second,
comparing homes within defined distances of BID borders suggests that homes within BIDs,
following their anticipation or launch, do not appreciate more than their outside neighbors.
Third, there is evidence of spillover effects. Homes closer to BIDs appreciate more than those
further from such. Results suggest that positive externalities might not be solely confined
to agents within a BID, but rather extend to its surrounding community.