Why Don't Enterprise Zones Work? Estimates of the Extent that EZ Benefits are Capitalized into Property Values

The study examines the impact of local Enterprise Zones (EZs) on commercial and industrial property values. Currently, 43 states have established EZ programs to target development incentives to economically distressed areas. While there is a substantial body of literature analyzing the effectiveness of EZ programs, the research has yielded varied findings. The varied results of EZ programs could potentially arise as EZ property values are bid up by businesses seeking to expand or locate operations in the EZs. This would reduce amounts that these businesses would otherwise spend on capital assets or labor. A hedonic price model is estimated to determine the effect of EZ status and nearby EZ activity on property values. The empirical results imply that EZ status may, in some instances, have a positive impact on EZ property values. However, the empirical results also suggest that these potential price effects may diminish as EZs are designated in other nearby locations.


Issue Date:
2006
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/132311
Published in:
Journal of Regional Analysis and Policy, Volume 36, Issue 1
Total Pages:
16




 Record created 2017-04-01, last modified 2017-08-26

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