Abstract

Residential community associations (RCAs) are said to be an efficient institutional agreement to limit local spillovers. While several studies have identified a positive marginal effect of RCA rules, none have explicitly measured the effectiveness of these institutions to limit local externalities. This study measures this effectiveness by estimating how the direct and spillover price impacts caused by foreclosure differ by RCA status. Using a spatial hedonic model that controls for selection bias using propensity score methods and coarsened exact matching we find that foreclosed RCA properties experience smaller direct foreclosure discounts and produce smaller spill-over effects than their non-RCA counterparts.

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Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 559-581
Launched on MUSE
2012-04-15
Open Access
No
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