Determinants of Historic and Cultural Landmark Designation: Why We Preserve What We Preserve

There is much interest among cultural economists in assessing the effects of heritage preservation policies. There has been less interest in modeling the policy choices made in historic and cultural landmark preservation. This paper builds an economic model of a landmark designation that highlights the tensions between the interests of owners of cultural amenities and the interests of the neighboring community. We perform empirical tests by estimating a discrete choice model for landmark preservation using data from Chicago, combining the Chicago Historical Resources Survey of over 17,000 historic structures with property sales, Census, and other geographic data. The data allow us to explain why some properties were designated landmarks (or landmark districts) and others were not. The results identify the influence of property characteristics, local socio-economic factors, and measures of historic and cultural quality. The results emphasize the political economy of implementing preservation policies.heritage preservation policy, landmark designation

Empowerment Zones, Neighborhood Change and Owner Occupied Housing

This paper examines the effects of a generous, spatially-targeted economic development policy (the federal Empowerment Zone program) on local neighborhood characteristics and on the neighborhood quality of life, taking into account the interactions amongst the policy, changes in neighborhood demographics and neighborhood housing stock. Urban economic theory posits that housing prices in a small area should increase as quality of life increases, because people will be more willing to pay to live in the area, but these changes in prices and quality of life will also affect the demographics of the population through sorting and the housing stock through reinvestment. Using census block-group-level data, we examine how housing prices respond to the Empowerment Zone policy intervention. Changes in the other dimensions of neighborhood quality (demographics and housing stock characteristics) will also help determine the total, or full effect on housing values of the policy intervention. This paper estimates these direct and indirect effects in a simultaneous equations setting, compares indirect and full effects, and examines the robustness of the effects to alternate estimation strategies. We find strong evidence for substantively large and highly significant direct price effects, while results suggest that the indirect effects are substantively small or even negative.economic development, empowerment zones, porperty values, household mobility, sorting

Making – or Picking – Winners: Evidence of Internal and External Price Effects in Historic Preservation Policies

Much has been written identifying property price effects of historic preservation policies. Little attention has been paid to the possible policy endogeneity in hedonic price models. This paper outlines a general case of land use regulation in the presence of externalities and then demonstrates the usefulness of the model in an instrumental-variables estimation of a hedonic price analysis – with an application to historic preservation in Chicago. The theoretical model casts doubt on previous results concerning price effects of preservation policies. The comparative statics identify some determinants of regulation that seem, on the face of it, most unlikely to also belong in a hedonic price equation. The analysis employs these determinants as instruments for endogenous regulatory treatment in a hedonic price analysis. OLS estimation of the hedonic offers results consistent with much of previous literature, namely that property values are higher for historic landmarks. In the 2SLS hedonic, robust estimates of the "own" price effect of historic designation are shown to be large and negative (approx. -27%) for homes in landmark districts. Further, significant and substantively important (positive) external price effects of landmark designations are found. The paper concludes with a discussion of the policy implications of these findings for historic preservation.hedonics, built heritage, heritage valuation, real estate economics

Neighborhood Dynamics and the Housing Price Effects of Spatially Targeted Economic Development Policy

Neighborhoods are the result of a complicated interplay between residential choice, housing supply and the influences of the larger metropolitan system on its constituent parts. We model this interplay as a system of reduced-form equations in order to examine the effects of a generous spatially targeted economic development program (the federal Empowerment Zone program) on neighborhood characteristics, especially housing values. This system of equations approach allows us to compute direct effects of the policy intervention as well as the effects mediated through non-price channels such as changes in the housing stock or neighborhood demographics. In the process, we are able to shed light on the rich simultaneity among neighborhood characteristics, including housing prices.economic development, simultaneity

How US cultural districts reshape neighbourhoods

Preprint; final version published as: Noonan, D. S. (2013). How US cultural districts reshape neighbourhoods. Cultural Trends, 22(3-4), 203–212. doi:10.1080/09548963.2013.817652Cultural districts are an increasingly popular and important element of both urban and cultural experiences in the USA. Cultural districts get invoked as a tool for revitalising neighbourhoods and regions, cultivating arts and cultural resources, and other goals. This article briefly describes the phenomenon of cultural districts in the USA, reviews some claims made about their impacts, and provides evidence of districts' effects. Neighbourhood-level statistical analyses identify socioeconomic trends in neighbourhoods affected by districts. The results reflect the heterogeneity in cultural districts and in cities' experiences with them. The findings inform policies supporting creative placemaking in general and cultural districts as a system

Arts of the States in Crisis: Revisiting Determinants of State-Level Appropriations to Arts Agencies

Clearly, much has happened to the state of public coffers and their ability to finance the arts in the past decade. This study extends Noonan (2007) into the next decade and the “Great Recession” that hit the U.S. (and world) economy–with state public finances severely exposed to the downward economic shock. The emphasis of the empirical analysis here is answering a twofold question: how well have past models predicted the past decade of funding patterns, and how have the funding determinants shifted in recent years. While the previous work found that some predictable patterns (e.g., there is much momentum in funding, demographics and partisan politics matter), there was insufficient evidence to back the claims that SAAs suffer disproportionately during times of fiscal stress. Further, political culture has changed substantially in the US in recent decades. From today's vantage, we can observe how well the older models predict the changes actually experienced. This comparison shows that the severe budget cuts experienced in the wake of the recession were to be expected, but there are some interesting shortcomings in the previous understanding, which points to a shift in the determinants of public arts funding in the U.S

Finding an Impact of Preservation Policies: Price Effects of Historic Landmarks on Attached Homes in Chicago 1990-1999

The impact of landmark designation on prices of the property and its neighbors sits at the core of the policy debate and empirical research on historic preservation. Yet these studies suffer from serious methodological limitations and biases. First, as important unobserved characteristics likely correlate with landmark designation, an omitted-variable bias results. Second, if designations depend on property values or neighborhood housing market conditions, the endogenous selection process further undermines inferences about preservation policies’ effects. This article outlines more robust empirical strategies and presents new evidence on landmark designation effects on property values. For a sample of Chicago home sales during the 1990s, a hedonic price analysis suggests that landmark buildings and districts sell at a small premium. To address the omitted-variable bias, a repeat-sales approach demonstrates significant spillover effects of landmark designation on prices. These estimates are also robust to sample-selection bias and some forms of spatial autocorrelation

Smoggy with a Chance of Altruism: The Effects of Ozone Alerts on Outdoor Recreation and Driving in Atlanta

Metropolitan smog alerts are prominent public information campaigns designed to enhance public health and to curb driving and other emissions. Unlike many other voluntary information-based environmental policies, air quality alerts target household behavior via forecast information about ambient concentrations rather than firm or product characteristics. This paper explores behaviors with high emissions (driving) and with high exposure (outdoor recreation) and underscores the difference between altruistic and risk aversion motivations. Behavioral impacts are identified using the threshold nature of daily air quality forecasts. A regression discontinuity (RD) design finds elderly users and exercisers tend to curtail their use of a major park following smog alerts. The RD design also reveals that households do not drive less on smog alert days. Juxtaposing high emissions behavior with high exposure behavior in the same study highlights how public forecast information may better trigger some responses and struggle to trigger others

Valuing Arts and Culture: A Research Agenda for Contingent Valuation

Presents information on the application of contingent valuation methodology (CVM) to value arts and cultural resources. Basic elements of CVM surveys; Criticisms against CVM as a measurement tool; Summary of results of a number of studies on willingness to pay for arts and theaters; Significance of CVM to fundraising efforts and in monitoring politicians' allocations of public resources; Discussion on communicating CVM findings