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Article
Finding an Impact of Preservation Policies: Price Effects of Historic Landmarks on Attached Homes in Chicago 1990-1999
Economic Development Quarterly (2007)
  • Douglas S Noonan, Georgia Institute of Technology
Abstract
The impact of landmark designation on prices of the property and its neighbors sits at the core of the policy debate and empirical research on historic preservation. Yet, these studies suffer from serious methodological limitations and biases. First, as important unobserved characteristics likely correlate with landmark designation, an omittedvariable bias results. Second, if designations depend on property values or neighborhood housing market conditions, the endogenous selection process further undermines inferences about preservation policies’ effects. This article outlines more robust empirical strategies and presents new evidence on landmark designation effects on property values. For a sample of Chicago home sales during the 1990s, a hedonic price analysis suggests that landmark buildings and districts sell at a small premium. To address the omitted-variable bias, a repeat-sales approach demonstrates significant spillover effects of landmark designation on prices. These estimates are also robust to sample selection bias and some forms of spatial autocorrelation.
Keywords
  • hedonics,
  • historic preservation,
  • cultural policy,
  • urban economics
Publication Date
2007
Citation Information
Douglas S Noonan. "Finding an Impact of Preservation Policies: Price Effects of Historic Landmarks on Attached Homes in Chicago 1990-1999" Economic Development Quarterly Vol. 21 Iss. 1 (2007)
Available at: http://works.bepress.com/doug_noonan/9/