Valuing the Benefits of Public Infrastructure in American Cities
Early Career Research Award
The goal of this project is to determine the benefit of public infrastructure investments to households and firms through increases in land values and tax revenues. We collect data on government infrastructure investments from the Census of Governments and use a perpetual inventory method to aggregate investment flows into infrastructure stocks. We then use panel methods to estimate the impact of infrastructure on local housing values, wages, and density, controlling for changes in other local characteristics, measured from a variety of sources, and using different instrumental variable techniques. Using a model of household and firm locations, together with housing production, we use these estimates to determine the value of public investments to households and firms, and the extent to which they are captured by local land owners, and local, state, and federal governments.