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Wednesday, September 13, 2006

Updated working paper

My paper with Carolyn Dehring and Mike Ward focusing on the contemporaneous impact of the Arlington stadium debate in 2004 on property values in Arlington, and the aborted stadium proposal in Dallas, has been updated. Our results have not changed from before - when the stadium was announced to possibly be built in Dallas, house prices in the city of Dallas increased and house prices in Dallas County declined, ceteris paribus. Why? The city of Dallas would not have contributed any tax dollars to the project, whereas the rest of Dallas County would have. When the Dallas stadium proposal was abandoned, the exactly opposite pattern is found - house prices decline in Dallas city and rebound in Dallas County.

In Arlington, the news was not as good. Over the summer and fall of 2004, various announcements that increased the likelihood that the stadium would be built in Arlington correlated with a slight decrease in property values in Arlington relative to the surrounding areas.

I have posted the paper at my personal site, but provide a link here.

Here's the abstract:
We investigate the impact of a potential new sports venue on residential property values, focusing on the National Football League's Dallas Cowboys' search for a new host city in the Dallas-Fort Worth area. We find that residential property values in the city of Dallas increased following the announcement of a possible new stadium in the city of Dallas. At the same time, property values fell throughout the rest of Dallas County, which would have paid for the proposed stadium. These patterns reversed when the Dallas stadium proposal was abandoned. Subsequently, a series of announcements regarding a new publicly subsidized stadium in nearby Arlington, Texas, all had a deleterious effect on residential property values in Arlington. In aggregate, average property values declined approximately 1.5% relative to the surrounding area before stadium construction commenced. This decline was almost equal to the anticipated household sales tax burden, suggesting that the average expected amenity effect of hosting the Cowboys in Arlington was not significantly different from zero.

More evidence that stadiums are bad news for host cities. What's interesting/unique about our paper is that we investigate the impact of a potential stadium on property values. That is, we investigate what happens long before the stadium is actually constructed and opens.

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