Spatial Econometric Analysis of Property Values---the Impact of Sports Facilities on Local Residential Property Values

153 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2008.Most literature on the economic impact of sports facilities examines the effect of these facilities on income, employment, and taxes at the metropolitan statistical area level. Very few studies examine the impacts of sports facilities on other parts of the local economy. This dissertation investigates comprehensively the economic impact from a spatial perspective of geographic proximity to a sports facility on residential property values (housing prices) in the surrounding areas. The main empirical part estimates a spatial hedonic price model using a cross-sectional data set of 136 sports facilities in 44 major Metropolitan Statistical Areas from 1990 to 2000 at the census block level. The distance from each block group to the block group where the sports facility is located measures spatial proximity. The results show that the presence of a sports facility has a significant positive impact on housing values for the 1990 sample and no significant effect for the 2000 sample. To further examine the impact of the presence of a sports facility, difference-in-difference (DD) approach is applied to facilities built in the 1990s. After controlling for the mean difference in housing values between treatment and control MSAs and the mean change between the post- and pre-construction period the DD estimates incorporating a spatial lag of the dependent variable, shows that there are still positive effects from the presence of a sports facility on housing values in MSAs with facilities. A second empirical part is a case study which focuses on the impact of a new sports facility, the Nationwide Arena, home of the NHL's Columbus Blue Jackets on nearby property values within a spatial econometric framework. Estimates from a spatial hedonic model show that the presence of the Nationwide Arena has a significant positive effect on the values of surrounding dwellings and this positive effect decreases as the distance from the arena increases. In particular, after correcting for spatial autocorrelation, housing values will increase by 1.75% given a 10% decrease in the distance from the house to the Nationwide Arena. The dissertation makes several contributions. First, it provides new evidence of the impact of sports facilities beyond income, employment, and taxes. Second, it explicitly incorporates geographic spillovers and spatial dependence into an empirical model and generates more precise parameter estimates. Third, it provides an expanded analytical framework for both policy decision-makers and researchers to better evaluate sports facility construction projects.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD