ML12338A390

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Official Exhibit - ENT000169-00-BD01 - the Impact of Stadium Announcements on Residential Property Values: Evidence from a Natural Experiment in Dallas-Fort Worth
ML12338A390
Person / Time
Site: Indian Point  Entergy icon.png
Issue date: 03/28/2012
From: Dehring C A, Depken C A, Ward M R
Univ of Georgia, Univ of North Carolina - Charlotte, Univ of Texas - Arlington
To:
Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 22098, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML12338A390 (12)
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THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES:EVIDENCEFROMANATURALEXPERIMENTINDALLAS-FORTWORTHCAROLYNA.DEHRING,CRAIGA.DEPKENandMICHAELR.WARD

  • Weinvestigatetheimpactofapotentialnewsportsvenueonresidentialpropertyvalues,focusingontheNationalFootballLeaguesDallasCowboyssearchforanewhostcityintheDallas-FortWortharea.We"ndthatresidentialpropertyvalues inthecityofDallasincreasedfollowingtheannouncementofapossiblenewstadiuminthecity.Atthesametime,propertyvaluesfellthroughouttherestofDallasCounty,whichwouldhavepaidfortheproposedstadium.Thesepatternsreversedwhenthe Dallasstadiumproposalwasabandoned.Subsequently,aseriesofannouncementsregardinganewpubliclysubsidizedstadiuminnearbyArlington,Texas,reducedres-identialpropertyvaluesinArlington.Inaggregate,averagepropertyvaluesdeclined approximately1.5%relativetothesurroundingareabeforestadiumconstruction commenced.Thisdeclinewasalmostequaltotheanticipatedhouseholdsalestaxburden,suggestingthattheaverageexpectedamenityeffectofhostingtheCowboysinArlingtonwasnotsigni"cantlydifferentfromzero.

(JELL83,R53,H73)I.INTRODUCTIONPublicexpendituresonaproject,andtherequisitepublictaxation,maybeeconomically justi"edifthebene"tsfromtheprojectoutweigh thecosts.Mostpublicprojects,suchasparks,roads,andpolice,havepublicgoodorexternalbene"tsthataredif"culttoquantify,making theevaluationofindividualprojectsdif"cult.

Eventually,however,thenetbene"tsoftheaccumulatedprojectsarerepresentedinthecostofadmissiontothecommunityintheformof housingpricesorrents.Positivenetbene"tprojectsraisehousepricesinaggregate,whilenegativenetbene"tprojectslowerhousepricesinaggregate.Wemeasurethenetbene"tsfromthepublicconsiderationofalargediscrete project,aprofessionalsportsstadiumfundedbyalocalsalestaxincrease.Thepublicexpenditureonsportsstadiumshaslongbeencontroversial,andthereisanextensiveempiricalliteratureinvestigatingtheimpactsofnewstadiumsonlocaleconomies.

Theoverwhelmingmajorityofstudiesfoundeithernonetbene"tsornetbene"tsthatarecon-siderablysmallerthanthecostsofeitheranew stadiumorhostingaprofessionalsportsfran-chise(seeSiegfriedandZimbalist[2000]andRappaportandWilkerson[2001]forthoroughreviews).Theseempiricalresultscontradictthe argumentsproposedbyadvocatesofstadiumstudies:thatanewstadiumwillprovidethecat-alystforanimprovementinthecommunitys

  • ThisanalysiswasundertakenwhileCraigDepkenwasamemberoftheEconomicsfacultyattheUniversityofTexasArlington.TheauthorsacknowledgehelpfulresearchassistancebyJoshuaBeenoftheUniversityofTexasArlingtonsGraphicalInformationSystemsProgramandhelpfulcommentsfromseminarpartici-pantsatthe2006meetingsoftheWesternEconomicAssociation.

Dehring:AssistantProfessor,DepartmentofInsurance,LegalStudiesandRealEstate,TheUniversityofGeorgia,Athens,GA30602.Phone(706)542-3809 (of"ce),Fax(706)542-4295,E-mailcdehring@terry.

uga.edu Depken:AssociateProfessor,DepartmentofEconomics,BelkCollegeofBusiness,UniversityofNorthCarolina-Charlotte,Charlotte,NC28223.Phone(704)687-7484,Fax(704)687-6442,E-mailcdepken@uncc.eduWard:AssociateProfessor,DepartmentofEconomics,UniversityofTexasatArlington,Arlington,TX,76019.Phone(817)272-3090(of"ce),Fax(817)272-3145,E-mail mikeward@uta.eduABBREVIATIONSCPI:ConsumerPriceIndexGLS:GeneralizedLeastSquaresMLS:MultipleListingServiceNCAA:NationalCollegiateAthleticAssociationNFL:NationalFootballLeagueContemporaryEconomicPolicy(ISSN1074-3529)doi:10.1111/j.1465-7287.2007.00077.xVol.25,No.4,October2007,627-6382007WesternEconomicAssociationInternational 627 ENT000169 Submitted: March 28, 2012 United States Nuclear Regulatory Commission Official Hearing Exhibit In the Matter of

Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3)

ASLBP #:07-858-03-LR-BD01 Docket #:05000247 l 05000286 Exhibit #:

Identified:

Admitted: Withdrawn:

Rejected: Stricken: Other: ENT000169-00-BD01 10/15/2012 10/15/2012 attributes.Nevertheless,newstadiumscontinuetobebuiltwithpublicfunds.

1Wecontributetoasmallbutgrowingliter-aturefocusingontheimpactofprofessionalsportsvenuesonresidentialpropertyvalues.Speci"cally,weinvestigatetwosetsofstadiumannouncementsconcerningtheNationalFoot-ballLeagues(NFL)DallasCowboyssearchforahostcityintheDallas-FortWorthMetroplex.Theseannouncementsprovidea quasi-naturalexperimenttotestwhetherthe announcementthatastadiummightbebuiltinaparticularareahasanyimmediateimpactonthesalepricesofresidentialproperties.

Becauseastadiumiscostlytorelocate,wetreattheannouncementsofpotentialstadiumrelo-cationaschangingtheprobabilityofalarge discreteeventandtestforaccumulatedanddif-ferentialimpactsofstadiumannouncementsoncontemporaneousresidentialpropertyvalues.We"ndthatpropertyvaluesincreasedinthecityofDallasaftertheannouncementthatthe CowboysmightmovefromthecityofIrvingto anewstadiumindowntownDallas,which wouldhavereplacedtheagingCottonBowl.However,inDallasCounty,whichwouldhavepaidforthestadiumwithnewtaxes,residential propertyvaluesdecreasedaftertheannounce-mentoftheFairParkstadiumproposal.Con-sistentwiththeseresults,whentheFairPark stadiumproposalwasabandoned,propertiesinthecityofDallasdeclinedinvalue,whilethepropertyvaluesinDallasCountyre-bounded.Intheend,theaccumulatedneteffect ofthestadiumannouncementsforbothDallasCityandDallasCountywaszero,consistentwithareturntothestatusquoante.When analyzingthreeannouncementsconcerningapotentialnewstadiuminArlington,we"ndthattheaccumulatedimpactsofthestadium announcementsre"ectedbetween1.3and1.5percentreductioninresidentialpropertysalespricesinArlington,ceterisparibus.Inother words,ateachpointinwhichitbecamemorecertainthatArlingtonwouldcontributelocaltaxdollarstoanewstadiumfortheCowboys,propertyvaluesinArlingtonfell.Whilethe reductioninpropertyvaluesre"ectsthecombi-nationofanexpectedlocalizedamenityeffectandanexpectedtaxeffect,wecannotreject thenullhypothesisthattheexpectedamenityeffectwasequaltozerobeforestadiumcon-structioncommenced.

2II.ANEWDALLASCOWBOYSSTADIUM:WHEREANDWHEN?InApril2001,theDallasCowboysan-nouncedthattheywereinterestedinobtaining anewpubliclysubsidizedstadiumtoreplace theagingTexasStadium.Builtin1972,TexasStadiumlacksmanyofthemodernrevenuegeneratingaspectsofnewstadiums,particu-larlymodernluxurysuitesandaclosedor retractableroof.Duringthespringandsum-mer2001,teamownerJerryJonesentertainedinitialproposalsfromanumberofcitiesinthe Dallas-FortWorthMetroplex,includingcur-renthomeIrving,Grapevine,Arlington,GrandPrairie,andDallas.Thesepreliminarydiscus-sionsweretabledaftertheSeptember11,2001,attacksinNewYorkCityanddidnotcomebacktopubliclightuntillate2003.Atthattime,theCowboysonceagainpub-liclymentionedtheirdesireforanewstadiumandsuggestedthatthestadiumcouldbebuiltinIrving,nearTexasStadium.Theresponse tothisproposalbythecityofIrvingwasnotencouraging.BecauseofIrvingsrelativelysmalltaxbase(populationof130,000in2000) anditsinabilitytoraisethesalestaxratebeyondthestate-mandatedcap,thecityofIrvingalonewasunlikelytobeableto"nance itscontributiontotheanticipated$1billionproject.3This,inturn,causedtheCowboystolookbeyondIrvingforanewhome.Intheearlymonthsof2004,anumberofcit-iesindicatedtheirdesiretocontendforthenewstadium,butitwasequallyapparentthatthesecitiessufferedthesameproblemsasIrving toosmallofataxbaseand/orlittleroomunder1.Duringthe1990sandthroughtheearly2000s,citiesacrosstheUnitedStateshaveengagedinwhatcouldbetermedavenuebuildingspree.Alittlemorethan50%ofthe122teamsinthefourmajorprofessionalleaguesintheUnitedStateshavemovedintoaneworsubstan-tiallyrenovatedvenuesince1990.Inaggregate,thesenewvenuescostanestimated$13.45billionincurrent($16billionin2005CPIadjusted)dollars.Publicdollarshavecontributed$10.27billion,ortwo-thirds,totheconstructionandmaintenanceofnewsportsvenues.2.TheDallasCowboysdidnotrelocatetoanothermetropolitanarea,thereforeanymetroarea-wideamenityeffectwasunaffectedbytheselectedstadiumsite.3.TheStateofTexashasnostateincometax.Thestateleviesa6.25%salestaxtofundthestategovernment.

Citiesareallowedtoadduptoanadditional2%salestaxtofundlocalgovernmentandspecialprojectssuchasroadmaintenanceandstadiums.Asof2004,thecityofIrvinghada1%salestaxforlocalgovernmentanda1%salestaxtocontributetotheDallasMetroTransitsystem.There-fore,thecityofIrvinghadnoroomundertheexistingstate-mandatedsalestaxcapof8.25%.628CONTEMPORARYECONOMICPOLICY thestatesalestaxlimit.InMarch2004,itwassuggestedthatFairParkindowntownDallas,homeofthe72-yr-oldCottonBowl,couldbepossiblesiteforanewCowboysstadium.

ThepossibilitythattheCottonBowlwouldbereplacedbyanewretractableroofstadiumgeneratedconsiderableexcitementintheDallas community.AnewstadiuminFairParkwouldmovetheDallasCowboysbacktotheirorigi-nalhometown(ratherthanplayinginasuburb ofDallas)andwouldensureboththeannual UniversityofTexasandtheUniversityofOklahomafootballgameandtheannualCottonBowlwouldremaininDallas.More-over,anewstadiumwouldallowDallastocontendtohostanynumberofevents,in-cludingaNationalCollegiateAthleticAssoci-ation(NCAA)championshipfootballgame,aSuperBowl,oranNCAAFinalFour.FairParkalsohastheadvantageofanexisting infrastructureabletohandlelargeevents.

4TheFairParkproposalcalledfortheCountyofDallastoincreaseitssalestaxratebyone-halfof1%topayforthestadium.Acountywidesalestaxincreasewasproposedtoexpandthetaxbaseenoughtocovertheanticipatedconstructioncosts.However,not-withstandingtheexcitementgeneratedbythestadiumproposal,oneconsiderableproblembecameapparent.ThecityofDallaswascon-tractuallyobligatedtoretirethepublicdebtitincurredtobuildthe$410millionAmericanAirlinesArena(homeoftheNationalHockey

LeaguesDallasStarsandtheNationalBas-ketballAssociationsDallasMavericks)beforespendinganyadditionaltaxdollarsonanewprofessionalsportsvenueofanykind.This contractualobligationremovedthecityofDal-las,butnottherestofDallasCounty,fromthetaxjurisdictionforanewfootballstadium.

5WhenitbecameclearthatthecityofDallaswouldnotbecontributinganytaxproceedstowardanewstadium,theremainingDallas Countypopulationandcityof"cialscooledtotheideaofbuildinganewstadiuminFairPark.TheFairParkproposalwasof"cially abandonedinthepublicmediaonJune6, 2004.Thereafter,theDallasCowboyspubliclyrenewedtheirsearchforanewhostcity.OnJuly17,2004,themayorofArlingtonannouncedthathehadbeeninnegotiationswiththeteamaboutthepotentialofbuildinganewstadiuminArlington.Inmanyways, Arlingtonisalsoagoodplacetolocateanewstadium.ArlingtonislocatedbetweenFortWorthandDallas,hasaccesstomultipleinter-statesandhighways,andthecityalreadyhoststheTexasRangersMajorLeagueBaseballclubandaSixFlagsamusementpark.Arlingtonis alsothethirdlargestcityintheDallas-FortWorthMetroplex(afterFortWorthandDallas),anditsapproximate$4billionannualeconomyand360,000peopleprovideasuf"-

cientlylargetaxbasetosubsidizeastadium.ArlingtonbuilttheRangersbaseballstadiumin1994,followingapublicreferendumin 1991,andthecitypaidoffthelastofthebase-ballstadiumbondsinearly2001.Afterward,inaccordancewithstatelaw,thecityofArlington reduceditslocalsalestaxratebytheone-halfof1%thatwouldhavebeendedicatedtoservicing thebaseballstadiumdebt.Therefore,inearly 2004,thecityofArlingtonwasuniqueamong areacitiesinthatithadalargetaxbaseandroomunderthestate-mandatedsalestaxcap.

6OnAugust17,2004,theArlingtoncitycouncilapprovedaballotinitiativetobedecidedduringtheNovember3,2004,generalelection.Theballotinitiativewasannounced toincludetwoelements.The"rstwouldap-proveupto$325millioninpublicmoneytocontributetolandacquisitionandconstruc-tioncostsforanewretractablerooffootball stadiumfortheDallasCowboys.Thesecondpartauthorizedthecitytoincreasethelocalsalestaxbyahalfcent,increaselocalhotel taxesby2percentagepoints,andincreaseArlington-basedcarrentaltaxesby5percent-agepointsto"nancethecityscontribution tothestadium.Theballotinitiativewasap-provedbythevotersofArlingtononNovem-ber3,2004,with55%votinginfavorand45%

votingagainst.Theprecisestadiumlocationwasdeterminedinearly2005,andinApril2005,thecityofArlingtonbegancollecting theadditionaltaxes.Thenewstadiumissched-uledtoopenforthe2009footballseason.Duringthestadiumcampaign,pro-stadiumactivistssolicitedaneconomicimpactstudy andproducedtelevision,radio,massmailings,andnewspaperadvertisingthattoutedthe4.FairParkishomeoftheannualTexasStateFair,thelargeststatefairintheUnitedStates.5.ThecityofDallaspassedthereferendumtobuildanewbasketball/hockeyarenain1998anddoesnotantic-ipateretiringthedebtforthatstadiumuntilwellafter 2020.6.Atthetimethestadiumproposalwasannounced,theprevailinglocalsalestaxrateinArlingtonwas7.5%.DEHRING,DEPKEN&WARD:THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES629 economicimpact"guresgeneratedintheirstudy.Ultimately,theyout-spentantisubsidyactivists$6millionto$43,000.TheCowboyswerelargecontributorstothepro-stadiumpro-ponents,hadplayerspostyardsigns,andthefamousteamcheerleadersattendedcampaigneventstoencouragepassage.

7ProponentspredictedthatthenewstadiumwouldbolsterArlingtonsentertainment-focusedindustryandthatthetwo-stadiumcomplexwouldbe anattractiveareainwhichpeoplewouldwant tolive.This,inturn,ledsometoclaimthatthenewstadiumwouldnotonlycontributetothequalityoflifeinthecityofArlingtonbutalso causeanincreaseinpropertyvalues.III.THEPOTENTIALIMPACTSOFANEWSTADIUMONPROPERTYVALUESLanduseexternalitiesarecostsorbene"tsgeneratedbylandusesthat"owoutsidemar-kettransactions.Becauseexternalitieshavebeenshowntobecapitalizedintohouseprices,theyprovidethejusti"cationformunicipal zoning.Intheabsenceofzoning,themarketwillover-allocatelandtonegativeexternality-producingloweruses.Externalitiescanin-

"uencepricesintwoways:scaleeffectsand boundaryeffects.Scaleeffectsrelatetotheabsoluteamountoftheexternality-producinguse,whileboundaryeffectsrelatetotheprox-imitytotheexternality-producinguse.

8Twoarticleshaveinvestigatedtheimpactofaprofessionalsportsfranchiseorsportsvenue onhouseprices.CarlinoandCoulson(2004)discussedthepublicgoodfacetofprofessionalsportsteams,whattheytermnonexcludable bene"ciaries.Theperceivedbene"tsthatmightaccruetothosewhowillneverattendagamerelatetoanenhancedsenseofcivic pride,whichshouldcauseanincreasedwill-ingnesstopayforlocalhousing,amongotherthings.Intheirexaminationofmonthlyrents in60metropolitanstatisticalareasin1993and1999,CarlinoandCoulsonfoundrentalpre-miumsinboththecentralbusinessdistrict andthesurroundingsuburbsofcitiesthathostNFLfranchises.

9Tu(2005)examinedtheimpactofFedEx"eld,thehomeoftheNFLsWashingtonRedskins,onsurroundinghousepricespre-andpost-stadiumconstructioninLandover, Maryland.Tucomparedpriceswithin3miles oftheFedEx"eldsiteacrossthreetimeperiods:predevelopment,development,andpostdevel-opment,wherethedevelopmentperiodstarts fromwhentheLandoversitewas"rstrevealedasapossiblesiteofthestadium.Predevelop-ment,hefoundthatpropertiesclosertothepro-posedstadiumsitehadlowervaluerelativetothoselocatedfurtherawayfromtheproposedsite.However,thisgradientbecamelesspro-nouncedfollowingthestadiumsdevelopment,suggestingthatapositiveexternalitywasgener-atedbythenewstadiumforpropertieslocated closertothestadium.Tuestimatedanaggregate increaseinpropertyvaluesofapproximately$42milliongeneratedbythenewstadium.Inthecasewhereanewstadiumisfundedwithalocalsalestax,anycapitalizationin localresidentialpropertypricesidenti"edwiththestadiumprojectisthesumofthreepossible effects:anegativetaxeffect,a(potentially)positiveincrementalcivicprideeffectcom-montothecityresidentsfromhostingthe team, 10andanambiguousexternalityeffect.

11Anypositiveexternalitiescreatedbyastadiumcouldbediscreteorrelatedtoproximity,suchasincome-earningopportunities,forexample, sellingparkingspace,oraccesstootherame-nitiessuchasnicerrestaurantsorhotels.Potentialnegativeexternalitieswouldinclude diminishedview,traf"ccongestion,noise,lossofprivacy,andcrime.Accordingly,theimpactofanewstadiumonhousevaluesisambigu-ousexanteandisthereforeaquestiontoberesolvedempirically.OuranalysisisclosesttothatbyTu,butwedifferinthatwefocusonannouncementsthat7.ThislobbyingisconsistentwithDepken(2006)whofoundthatmuchofthepubliccostofanewprofes-sionalbaseballstadiumiscapitalizedinthevalueofthe franchise.8.Thereisalargeliteratureinvestigatinglanduseexternalities.Asmallsampleincludesestimatingtheeffect ofwateramenitiesonhouseprices(BrownandPollakowski, 1977;CasselandMendelsohn,1985;Darling,1973;Knetsch,1964;LansfordandJones,1995)andtheeffectofpublicopen-spaceexternalitiesonhouseprices(Correll,Lillydahl,andSingell,1978;DehringandDunse,2006;EspeyandOwusu-Edusei,2001;Irwin,2002;WeicherandZerbst,1973).Theeffectsofpotentiallynegativeexternalitiessuchastransmissiontowers,powerlines,grouphomes,airports,andland"llsonresidentialprop-ertyvalueshavealsobeenexamined.9.Coates,Humphreys,andZimbalist(2006)sug-gestedthatCarlinoandCoulsonsestimationresultsare basedonrelativelyfewobservationsandaretherefore notasrobustasclaimed.Inarejoinder,CarlinoandCoulson(2006)suggestedthatthisargumentisincorrect.10.HakesandHutmaker(2006)foundthatfansnearestthestadiumvaluetheteamthemost.11.SeeOates(1969),BloomandYinger(1983),andManandBell(1996).630CONTEMPORARYECONOMICPOLICY astadiummight/willbebuiltinaparticulararea,allofwhicharepredevelopment,ratherthanpre-andpost-stadiumconstruction.Weimplicitlyassumethathousingmarketsex-hibitinformationalef"ciency,suchthatanyexpectednetexternalityeffectsarecapitalizedinhousepriceswellinadvanceoftheactual projectcompletion.OurarticlealsodiffersfromthatofTuinthatweinvestigatetheimmediateimpactofstadiumannouncements onpropertyvalues.TufoundthatFedEx"eld enhancedproximatepropertyvaluesbyap-proximately$42millioninaggregate,whichre"ectsapureamenityeffect.Incontrastto theCowboysstadium,FedEx"eldwasessen-tiallyprivatelyfunded,implyingnolocaltaxeffectgeneratedbythestadium.Ouruseofannouncementdatesratherthanprojectcompletiondatesisnotwithoutprece-dent.Forexample,Colwell,Dehring,and Lash(2000)usedannouncementdatestotesttheeffectofgrouphomesonneighborhoodhouseprices.Theymeasuredtheannounce-mentdateasthedaythepublicwas"rstmade awarethatagrouphomewastobeopenedinthearea.Similarly,Dehring(2006)usedordi-nancedates,ratherthantheeffectivedatesof regulation,toinvestigatetheeffectofcoastalconstructioncodechangesonvacantlanddevelopmentinFlorida.Usingannouncement datesavoidspotentialspeci"cationbiaswhenthepurposeoftheempiricalanalysisistoiden-tifytheimpactofpolicychangesonproperty values.Tothedegreethatpropertymarkets incorporatenewinformationinatimelyfash-ion,propertyvalueadjustmentsmighthavealreadyoccurredbythetimethepolicy changesactuallytakeeffect.IV.DATAANDMETHODOLOGYOurtestoftheimpactofstadiuman-nouncementsonresidentialpropertyvalues combineshedonicpricingmodels,eventstudymethodology,anddifference-in-differenceestimators.Hedonicpricingrevealstheim-plicitpriceofhousingandlocationattributes, aswellasanypriceeffectsfromthestadium.

12Becauseeachannouncementincreasesor decreasestheprobabilitythatastadium wouldbebuiltinaspeci"clocation,eachisallowedtohaveanimpactonpropertyvalues(MacKinlay,1997).Weemployadifference-in-differenceidenti"cationstrategytodistin-guishthenetamenityeffectbeforeandaftereachannouncement.Thereisalargeliteratureonhedonicpric-ingmodelsofhouses.Thesestudiestypically "ndthatinlargemetropolitanareas,most ofthevariationinhousepricescanbeexplainedbyahousesage,size,andthequal-ityoflocalpublicschools.Otherfactors includetheavailabilityofparking,whether thepropertyincludesaswimmingpool,andthetimeofsale.Followingstandardpractice,weincludethesecontrolsaswellasthevaria-blesofinteresttomeasurestadiumeffects.Weinvestigatetheimpactof"veseparatestadiumannouncements,twoofwhichcon-cernDallasandthreeofwhichconcernArling-ton.The"rsttwoannouncementsrepresentthestadiumpotentiallycomingtoandthen leavingtheFairParkdistrictneardown-townDallas.The"rst(second)ofthesean-nouncementsisassociatedwithanincreased (decreased)probabilitythatanewstadium wouldbebuiltindowntownDallas.Threeadditionalannouncementscenteronthepro-posaltobuildastadiuminArlington.These announcementscorrespondwiththedatesonwhichthemayorofArlingtonannouncedhispreviousnegotiations,thecitycouncilvote toapproveaballotinitiative,andtheaf"rma-tiveballotinitiativeoutcome(Table1).OurestimationstrategyisbasedoneacheventchangingtheprobabilityofdifferentsetsofhousesbeingaffectedbytheproposedCow-boysmove.After2003,itwasincreasinglylikelythattheCowboysfranchisewouldrelo-catesomewherewithintheDallas-FortWorthmetropolitanarea.Atthetime,theremayhavebeensixorsevenviablesites,implyingthat eachhadanexantenontrivialpositiveprob-abilityofbeingchosen.Weassumethatthe"rstDallasannouncementincreasedtheprob-abilitythattheteamwouldlocatetoFairParkandthatthesecondannouncementreducedthisprobabilitytozero.Wefurtherassumethat theprobabilityoftheteamrelocatingtoArling-tonincreasedwiththenextthreeannounce-mentsduringthesummerandfall2004.Oneobviousdifferencefromstandardeventstudiesisthatwecannottrackdailychangesinthevalueofasinglehousebutmustdrawinferencesfrompricesofdifferent houses.Anotheristhatwearenotcalculatingthereturnrelativetothegeneralmarketasone12.Rosen(1973)isthegroundbreakinghedonicpric-ingstudy,butseeSirmans,Macpherson,andZietz(2005)forathoroughreviewofhedonicpricinginrealestate.DEHRING,DEPKEN&WARD:THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES631 woulddowhenanalyzingabnormalstockreturns.Anypriceeffectfromaproposedsta-diumshouldbere"ectedinthepricesofhousesbene"ting,orsuffering,fromtheexpectednet effectatthetimeoftheannouncement.Forexample,thepublicexpenseoftheFairParkstadiumwastohavebeenfundedbytaxation withinDallasCounty.Allelseequal,we expectthistaxeffecttocauseareductioninDallasCountyhousepricesafterthe"rstannouncementandacommensurateincrease afterthesecondannouncement.Weemployageneraldifference-in-differenceidenti"cationstrategytocalculatetheeffectsof stadiums.Forexample,forthe"rstannounce-ment,weincludeaDallasCountydummyvari-able,anannouncementdatedummyvariable, andtheDallasCountydummyvariableinter-actedwiththepostannouncementperiod.Sincethemeasuredeffectoftheinteractionrepresentsthedifferentialimpactofthestadiumonhouses inDallasCountyrelativetoeithergeneralannouncementeffectsindependentoflocationorDallasCountyeffectsatdifferenttimes,we identifyitwiththeexpectedeffectofincreasedtaxationto"nancethestadiumonDallasCountyhouses.Ourestimatingequationisrepresentedas:

lnPRICE i5 bFEATURES idANNOUNCE iuTAXJURIS igANNOUNCE iTAXJURIS ie i;1where b , d , u,and garevectorsofparameterstobeestimatedand e iisacompositezero-meanerrortermthatfacilitatesneighborhood"xedeffectsandspatialcorrelation.Thedependentvariableln(PRICE)isthelogarithmofthesalepriceofthehouse.ThevectorFEATURESincludesbothstructuralandlocationattributesincludingstructure age,agedsquared,amountoflivingarea,area squared,thenumberofbaths,theexistenceofapool,numberofparkingplaces,anddummyvariablesforthepublicschoolsservingthe school.ThevectorANNOUNCEincludestheappropriatedummyvariables,forthesampleanalyzed,indicatingwhetherthesalesprice wasagreeduponaftereachofthe"vean-nouncements.ThevariableTAXJURISisadummyvariable,indicatingthatthehomeiswithinthejurisdictionoftheproposedtaxintendedtofundthepublicshareofthesta-diumbuildingexpense.FortheDallasFairParkproposal,weincludetwoseparatedummyvariables:oneforthecityofDallasandoneforalltheothercitiesinDallasCounty.TheinitialFairPark stadiumproposalincludedacountywidesalestaxtopayforthestadium.However,thecityofDallaslikelywouldnothavecontributedto thefootballstadiumuntilithadretireditsdebtforthebasketball-hockeyarenabuiltin1998.Itisnotclearifhomeownersinthecityof Dallasanticipatedhighertaxesornot.Ifthe marketanticipatedtaxburdenscorrectly,theannouncementofthestadiumcomingtoDallaswouldhavebeenapureamenityeffectintheTABLE1DallasCowboysStadiumAnnouncementsDateDescriptionAnnouncement1April30, 2004ProposaltobuildastadiumatFairParkindowntownDallas.TheproposedstadiumwouldreplacetheagingCottonBowl,andthepubliccontributiontoconstructioncostswouldbe"nancedbyahalfcentsalestaxthroughoutDallasCounty.Ultimately,thecityofDallaswouldnotcontributetothisadditionaltaxbecauseofcontractualobligationstoretireitsdebtfortheAmericanAirlinesArena.Announcement2June9,2004TheFairParkproposalof"ciallyabandoned.Announcement3July17, 2004ArlingtonsmayorannouncesthathehasbeeninsecretnegotiationswiththeteamaboutbuildinganewpubliclysubsidizedstadiumneartheexistingbaseballstadiuminArlington.Announcement4August17, 2004ArlingtonscitycouncilapprovesastadiumballotinitiativefortheNovember 2004generalelection.Theballotinitiativeasksvoterstoapproveupto$325milliontowardlandacquisitionandconstructioncostsforanewstadiumlocatedneartheexistingbaseballstadiuminArlington.Theballotinitiativealsoincludesaone-halfcentsalestaxinArlingtonaswellasadditionalhotelandcarrentaltaxes.Announcement5November3, 2004ArlingtonvotersapproveballotinitiativeonNovember3,2004,andthe additionaltaxesareinstitutedonApril1,2005.632CONTEMPORARYECONOMICPOLICY cityofDallas,similartotheeffectfoundbyTu(2005),whilepropertyvaluechangesintherestofDallasCountywouldhavebeenaneteffect.WhentheFairParkstadiumproposalwasaban-doned,thereversepatternwouldbeexpected.FortheArlingtonstadiumproposal,wede"neTAXJURISasthecityofArlington.

WeidentifyeachannouncementinArlingtonassignalinganincreasedlikelihoodthatasta-diumwouldbebuiltinArlington.Thus,ifthe proposedstadiumhadanetpositive(negative) expectedimpactonthecommunitysattributes,weanticipateeachannouncementtocorrespondwithanincrease(decrease)onhousepricesin Arlington,relativetothesurroundingareas.Threepointsregardingthetaxjurisdictionindicatorsareworthmentioning.First,forboth stadiumproposals,thepubliccontributiontothestadiumscostwastobe"nancedbyanin-creaseinthelocalsalestaxrate.Citizensof onecityorcountymaywellbetaxedinpropor-tiontotheirtaxablepurchaseswithinthejuris-diction.However,someownersofhousesin thetaxjurisdictionmaypurchasetaxableitems outsidethejurisdiction.Theconverseistrueforhomeownersinnearbycities.BecausethelandareaofDallasCity,DallasCounty,andArling-tonislargerelativetonormalshoppingdistan-ces,weexpectthemeasurementerrorfromtheseborderregionstobesmall.Second,usinga dummyvariable,weareimplicitlyassumingthatthetaxburdenisroughlyproportionaltothehousevalue.Thisislikelytoholdsinceboth housingvalueandexpendituresontaxableitems arelikelytobehighlycorrelatedwithhouseholdincome.Third,theremaybeapositiveamenityeffectfromhavingonestownassociatedwiththe team,regardlessofthedistancetothestadium.Inthiscase,themeasurementofthetaxjurisdictioneffectisthenetofthetaxandamenityeffects.Weemployageneralizedleastsquares(GLS)estimatorthattakesintoaccountpos-sibleheteroscedasticityandspatialautocorre-lation.Sincewecannotrejectthattheerrortermhasacommoncomponentatthecitylevel,ourestimatorallowsthevariancestodif-feracrossgeographicareas.Weincludea"xed effectforthepublicelementaryschoolthatahomeownerschildrenwouldlikelyattend.Theelementaryschoolalmostalwaysidenti-

"esamiddleandahighschoolaswell.

13However,itislikelythatthereisalsospatialcorrelationthatin"uencesthevarianceofhousepropertiesaswell.WethereforeusearobustGLSestimatorthatallowsfor"xed effects(meanshifters)andclustering(varianceshifters)basedonelementaryschools.Theestimatorweemployusesagreatdealofinfor-mationasthereare745elementaryschoolsin-cludedintheDallas-centeredsampleand649elementaryschoolsincludedintheArlington-centeredsample.Ourdataincludetwosamplesofresiden-tialpropertysalesintheDallas-FortWorth MetroplexfromJanuary2004through March2005.TheresidentialpropertysalesdatawerecollectedfromtheMultipleListingService(MLS).Wesubtract30dfromthe closingdate,reportedbytheMLS,tomorecloselyalignhousecontractdateswiththeannouncementeffects.

14Toavoidunduein"uenceofoutlierproperties,weexcludedobservationsthatcorrespondedtohousesmorethan70yrold,morethan7,000square feet,lessthan500squarefeet,orwithmore thansevenbathrooms.BoththeDallas-andArlington-centeredsampleswerefurtherlimitedbyexcludingpropertiesbeyond20 milesfromtheproposedstadiumsite.TheDallas-centeredsampleultimatelycomprises42,351observations;theArlington-centered samplecomprises32,061observations.ThedescriptivestatisticsofthedataareprovidedinTable2.The"rsttwocolumnsreportthe meanandstandarddeviationofourdepen-dentandindependentvariablesfortheDallas-centeredsample.Thesecondtwocol-umnsreportthedescriptivestatisticsforthe Arlington-centeredsample.V.EMPIRICALRESULTSANDDISCUSSIONWeestimatethedifference-in-differencemodeldescribedinEquation(1)includingele-mentaryschool"xedeffects.Weaccommo-datespatialcorrelationinpropertyvaluesbyclusteringtheerrortermsbyelementary13.Evidencesuggeststhatthereisahighcorrelationbetweenpropertyvalueandthequalityofthepublicschools(DownesandZabel,2002).14.Thisisnotalwaysguaranteedtodirectlyalignhousesaledateswithannouncementdatesasclosing timescandiffer.However,theaveragetimetocloseisapproximately30d,andweanticipatethatanyothermeasurementerrorintroducedbyouradjustmentisnotsystematicallyrelatedtothestadiumannouncements.Therefore,theadjustmentwouldonlyin"uencetheef"-ciency,butnottheconsistency,ofourestimationresults.DEHRING,DEPKEN&WARD:THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES633 school.ThefullestimationresultsaredetailedinTables3through5.TheprimaryhedonicregressionresultsareprovidedinTable3.Theleftcolumnprovides resultspertainingtotheDallassample,cen-teredontheCottonBowlindowntownDallas,whereastherightcolumnprovides resultspertainingtoArlington,centeredon theBallparkinArlington(theapproximatesiteoftheproposedCowboysstadium).Thehedonicregressionresultsareconsistentwiththeresultsobtainedusingdatafromother largemetropolitanareas.Forinstance,inboththeDallasandtheArlingtonsamples,eachadditionalyearofagereducestheaverage propertybyapproximately1.3%,althoughthisdeclineistemperedabitbythepositivecoef"cientonthequadraticofage.Likewise, eachadditional20squarefeetaddsapproxi-mately1%tothevalueofthehouse,althoughthisincreaseisalsotemperedbythenegativeparameterestimateonthequadraticofsquareTABLE2SampleDescriptiveStatistics VariableDallasSampleArlingtonSampleMeanSDMeanSDLogofprice11.970.6111.860.64Age(yr)23.2617.1522.6418.56Squarefeet2,165.00911.092,078.58877.65Pool(1 5yes)0.170.380.150.35Numberofbathrooms2.520.922.420.88Numberofgaragespots1.790.831.760.83Numberofstoreys1.330.481.300.48February0.090.290.080.27March0.080.270.080.27April0.080.280.090.28May0.080.280.080.28June0.090.290.090.29July0.090.280.090.29August0.080.280.090.28September0.070.260.070.26October0.070.250.070.26November0.060.240.070.25December0.070.250.070.26Timetrend7.113.586.893.43DallasCity0.230.42DallasCounty0.460.49 Arlington0.130.33Announcement10.630.48Announcement20.520.49Announcement30.390.48Announcement40.300.46Announcement50.100.31DallasAnnouncement10.170.37DallasAnnouncement20.140.35ArlingtonAnnouncement30.060.23ArlingtonAnnouncement40.050.21ArlingtonAnnouncement50.020.13Numberofobservations42,35132,061Elementaryschools745689 Notes:Datare"ectresidentialpropertysalesfromJanuary1,2004,throughFebruary28,2005,withcompletedata,andlocatedwithin20milesoftheCottonBowlfortheDallassampleandtheBallparkinArlingtonfortheArlingtonsample.DataobtainedfromtheDallas-FortWorthMetroplexMLS.Januaryisusedasthereferencemonth.Dummyvariablemeansdonotsumto1becauseofrounding.634CONTEMPORARYECONOMICPOLICY footage.Inbothcities,apoolonthepropertyaddsapproximately8.5%,eachbathroomaddsanadditional5%,eachcoveredparkingspotadds5%,andanadditionalstorey,hold-ingsquarefootageconstant,reducestheaver-agepropertyvaluebyapproximately9%.Theprimaryempiricalresultsofinterest,thosepertainingtothestadiumannounce-ments,arereportedinTables4and5.FortheDallassample,wefocusonthe"rsttwo announcements:theCowboysmightrelocate toFairPark(Announcement1)andtheCow-boyswillnotrelocatetoFairPark(Announce-ment2).Inthiscase,thecityofDallaswould enjoytheamenitybene"tsofthestadiumbutwouldnothavecontributedtothestadiumsub-sidy.However,therestoftheCountyofDallas wouldhavepaidforthestadiumwithoutenjoy-inganyproximityamenitiesassociatedwiththestadium.Therefore,fortheDallassample,we controlforbothDallasandDallasCountyannouncementeffects.InthecaseofArlington,wefocusonthelastthreestadiumannounce-ments:thecitywasinnegotiationswiththe team(Announcement3),theArlingtoncitycouncilapprovedaballotinitiativeconcerningthestadium(Announcement4),andtheaf"r-mativeoutcomeoftheNovember2004ballotinitiative(Announcement5).TABLE3EstimatedValuesofHousingCharacteristics DallasSample(1)ArlingtonSample(2)Age0.013***(0.001)0.013***(0.001)Agesquared (103)0.149***(0.018)0.127

      • (0.017)Squarefootage

(103)0.511***(0.018)0.550

      • (0.017)Squarefootage squared(106)0.029***(0.002)0.004
      • (0.002)Pool(1 5yes)0.081***(0.004)0.087
      • (0.004)Bathrooms0.045
      • (0.004)0.049
      • (0.005)Coveredparking spots 0.047***(0.003)0.055
      • (0.004)Numberofstoreys0.096***(0.006)0.098***(0.006)Constant 11.10***(0.029)10.96
      • (0.028)Observations 42,351 32,061 R 2 0.89 0.89 Notes:Dependentvariableislogofsaleprice.Speci"-cationsincludemonthlydummyvariablesandamonthlytimetrend.TheDallassampleiscenteredonFairParkindowntownDallas.TheArlingtonsampleiscenteredontheRangersbaseballstadiuminArlington.Theerrorsareclusteredonelementaryschools.Robuststandarderrorsaregiveninparentheses.
      • p ,.01.TABLE4UnconstrainedStadiumAnnouncementEffectsDallasSample(1)ArlingtonSample(2)Announcement10.008(0.029)Announcement20.006(0.010)DallasCity0.008(0.029)DallasCityAnnouncement1 0.021**(0.011)DallasCityAnnouncement20.005(0.011)DallasCounty0.012(0.021)DallasCountyAnnouncement10.008(0.007)DallasCountyAnnouncement20.008(0.006)

Arlington0.010(0.037)Announcement30.004(0.008)Announcement40.004(0.009)Announcement50.009(0.017)

ArlingtonAnnouncement30.002(0.011)

ArlingtonAnnouncement40.011(0.012)

ArlingtonAnnouncement50.001(0.009)

Notes:Dependentvariableislogofsaleprice.Allspeci"cationsincludehouseage,agesquared,squarefootage,squarefootagesquared,numberofbathrooms,numberofgarageparkingspots,whetherthepropertyhasapoolornot,thenumberofstoreys,month-speci"cdummyvariables,atimetrend,andelementaryschool"xedeffects.TheDallassampleiscenteredonFairParkindowntownDallas.TheArlingtonsampleiscenteredontheRangersbaseballstadiuminArling-ton.Theerrorsareclusteredonelementaryschools.Robuststandarderrorsaregiveninparentheses.

    • p ,.05.DEHRING,DEPKEN&WARD:THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES 635 The"rstcolumnofTable4presentsesti-mationresultsrelatingtothepotentialdown-townDallassite.TheinitialannouncementthattheCowboysmightrelocatetoFairPark inDallasCitycorrespondedwithanincreasein propertyvaluesinDallasCity.Ontheotherhand,this"rstannouncementreducedpropertyvaluesthroughouttherestofDallasCounty (althoughtheparameterestimateisnotdistin-guishablefromzero).WhentheCowboysannouncedthattheywerenotgoingtorelocate toFairParkindowntownDallas,theoppositequalitativeimpactsonpropertyvaluesinthecityofDallasandthroughoutDallasCounty areexpected.Combined,theseresultssuggestthattherewereexpectationsofamenityeffectsofaCowboysstadiuminthecityofDallas butthatthebene"tswereoutweighedbythe expectedtaxburdenofthestadium.ThesecondcolumnofTable4reportssimilarestimationresultsfortheArlington sample.Inthiscase,onlythelastthreean-nouncementdatesareinvestigated.BecauseArlingtonwastheonlycityinthemetropoli-tanareathatwouldchargeadditionalsalestaxtopayforthepubliccontributiontothestadium,thereisnoneedforaseparatecounty dummyvariable.Theresultssuggestthateachofthe"rsttwostadiumannouncementscon-cerningArlingtoncorrelatedwithareduction inresidentialpropertyvaluesinArlingtonrel-ativetoothernon-Arlingtonpropertieswithin20milesoftheproposedstadiumsite.Thelastannouncementevent,correspondingwiththe af"rmativeNovembervote,carriesapositiveparameterestimate.Whilenoneofthethreeparameterestimatesareindividuallystatisti-callysigni"cant,theirsumof0.012isstatis-ticallylessthan0atthe8%level.ThissuggeststhattheaveragepropertyinArlingtonthatsoldafterthestadiumreferendummighthave falleninvaluebutratherclearlydidnot increaseinvaluewiththeannouncementsleadinguptothereferendum.OnepossibleproblemwiththeresultsreportedinTable4istheassumptionthat eachannouncementhasaseparateandiden-ti"ableimpactonresidentialpropertyval-ues.15Thisapproachmightasktoomuchofthedata.Amoreparsimoniousapproach istorestricteachstadiumannouncementtohaveanidenticalaccumulatingimpactonres-identialpropertyvalues,thatis,werestricttheparametersonthedifferentannouncements tobeequal.Whenimposingthisrestriction, thedummyvariablesfortheannouncementperiodsaresummed.

16GiventheresultsinTable4,weexpectthesecondannouncementeffectinDallastocompletelyoffsetthe"rstastheCowboysultimatelydidnotrelocatetoFairPark;thiswouldbeconsistentwith areturntothestatusquoante.However,TABLE5ConstrainedStadiumAnnouncementEffectsDallasSample(1)ArlingtonSample(2)Accumulatedgeneralannouncementeffects0.007(0.009)0.001(0.005)DallasCity0.003(0.029)DallasCounty0.007(0.021)DallasCityaccumulatedannouncementeffects0.012(0.010)DallasCountyaccumulatedannouncementeffects0.004(0.003)

Arlington0.011(0.037)

Arlingtonaccumulatedannouncementeffects0.005**(0.002)Notes:Dependentvariableislogofsaleprice.Allspeci"cationsincludehouseage,agesquared,squarefootage,squarefootagesquared,numberofbathrooms,numberofgarageparkingspots,whetherthepropertyhasapoolornot,thenumberofstoreys,month-speci"cdummyvariables,atimetrend,andelementaryschool"xedeffects.TheDallassampleiscenteredonFairParkindowntownDallas.TheArlingtonsampleiscenteredontheRangersbaseballstadiuminArlington.Theerrorsareclusteredonelementaryschools.Robuststandarderrorsaregiveninparentheses.

    • p ,.05.15.Aspointedoutbyahelpfulreferee,theuseofannouncementdatesinareducedformframeworkcannotdistinguishbetweennocapitalizationeffectandoffsettingchangesintheunderlyingsupplyanddemandforhousingbasedontheprobabilityofanewstadiumbeingbuiltin aparticulararea.16.ThesumofthedummyvariablesinDallascantakeavalueof0or1;thosewithavalueof0soldbefore Announcement1,thosewithavalueof1soldafterAnnouncement2.ForpropertiesinArlington,thesumoftheannouncementdummyvariablesfallsbetween0and3,thatis,thevaluewillbe0ifthepropertysoldbeforeAnnouncement3and3ifthepropertysoldafterAnnouncement5.636CONTEMPORARYECONOMICPOLICY inArlington,thecumulativeimpactoftheArlington-speci"cstadiumannouncementsisambiguous.InColumn2ofTable5,theresultsfromtheDallassamplesuggestnonetimpacton propertyvaluesfromthetwoannouncementsconcerningtheFairParkproposal.Thissug-geststhatthevaluesofpropertiessurroundingFairParkreturnedtothestatusquoantewhentheFairParkproposalwasabandoned.How-ever,inColumn3ofTable5,theresultsfrom theArlingtonsamplesuggestthateachofthethreeannouncementscorrespondedwithanaveragereductioninresidentialpropertyval-uesinArlingtonofapproximatelyone-halfof1%.Therefore,theaggregatedimpactoftheannouncementsconcerningtheArlingtonsta-diumproposalwasanaveragereductioninArlingtonpropertyvaluesofapproximately1.5%,aresultthatisstatisticallydifferentfrom zero(p 5.023).AlthoughtheindividualArlington-speci"cannouncementeffectsareinsigni"cant,the signi"cantandnegativecumulativeeffectof thethreeannouncementsonthepropertyval-uesinArlington,relativetothesurroundingcities,isstriking.Proponentsofstadiumsub-sidiesoftenalludetothepositiveexternalitiesthestadiumwillgenerateforthehostcity.Ifsuchclaimsweretrue,thentheimpactofan increasingprobabilitythatastadiumwouldbebuiltinArlingtonwouldbeexpectedtoincreasepropertyvaluesinthatcity.Inour analysisoftheannouncementsconcerning astadiuminArlington,we"ndnocompellingevidenceofindividualannouncementsin-creasingthevalueofpropertiesinthecity wherethestadiumwouldbebuilt.Rather,we"ndanegativeandstronglysigni"cantcumulativeimpactoftheannouncementson propertyvalues.Combined,theseresultscastsuspicionontheclaimsthatstadiumsubsidiesarejusti"edbypecuniaryandnonpecuniary positiveexternalitiesastadiumprovideshostcityresidents.VI.CONCLUSIONSTheaggregatedimpactofstadiuman-nouncementswhenstadiumsarefundedbymunicipaltaxdollarsisthecombinationofthreedistinctelements:thetaxburden,whichcausesareductioninpropertyvalues;the overallcityamenityeffect,whichcausesanincreaseinpropertyvalues;andtheproximityamenityeffect,whichhasanambiguouseffectonresidentialpropertyvalues.Theresultspre-sentedhereinsuggestthattheaggregatedexpectedcityamenityeffectandlocalsales taxburdenassociatedwiththeproposaltobuildapubliclysubsidizedstadiumfortheDallasCowboysinArlington,Texas,reduced residentialpropertyvalues.WhatisthemagnitudeoftheamenityeffectforArlington?Abackoftheenvelopecalcu-lationsuggeststhatahouseholdoffourwith

$50,000incomemightcontributeupto$60/yrinlocalsalestaxdedicatedtothestadiumcon-struction.

17Assumingawagegrowthrateof4.5%/yr,the30-yrpresentvalueofthetaxpaymentswouldbeapproximately$2,000.Duringthesampleperiod,theaverageresiden-tialpropertyinthecityofArlingtonsoldfor$120,000.The95%con"denceintervalfortheaccumulateddeleteriouseffectofthevarious stadiumannouncementsonaveragepropertyvaluesinArlingtonis($3,343to$142),centeredon$1,742.Therefore,theaveragereductioninpropertyvalueisnotstatisticallydifferentfromtheexpectedadditionallocalsalestaxburden.Inotherwords,thegeneralamenityeffectinthecityofArlingtonisnot distinguishablefromzero.ThisresultdiffersfromthatofTu(2005)whofoundapositiveamenityeffectforprop-ertieslocatedwithin3milesoftheNFLsWashingtonRedskinsstadiumbuiltin1995.Theremaybesigni"cantdifferencesbetween theareaofLandover,Maryland,wherethe Redskinsbuilttheirstadium,andArlington,Texas,wheretheCowboysarebuildingtheirstadium.Additionally,thetaxeffectsassoci-atedwiththeCowboysprojectdidnotplaguetheRedskinsprojectandthismighthelpexplainthedifferencesintheresults.Twoquestionsremainunanswered.First,whatisthepatternofchangesinresidential propertyvaluesinthecityofArlingtonas theCowboysstadiumisconstructedandwhatwillhappentoresidentialpropertyvaluesafterthestadiumopens?Ifpropertyvaluesin Arlingtonincrease afterthenewstadiumopens,thismightsimplyoffsetthereductioninpropertyvaluesincurredwhenthestadiumprojectwasannounced.Second,iftheprop-ertyvaluesfellinthecityofArlingtonduringthestadiumcampaign,whydidthestadium17.BasedonIRSStateSalesTaxDeductiontables,2005InstructionsforSchedulesA&B(Form1040).DEHRING,DEPKEN&WARD:THEIMPACTOFSTADIUMANNOUNCEMENTSONRESIDENTIALPROPERTYVALUES637 projectwintheapprovalofamajorityofArlingtonvoters?Perhaps,thedistributionofthenetbene"tsofaCowboysstadiumwassuf"cientlydistortedsuchthatamajority ofthevotersapprovedthemeasureevenasaveragepropertyvaluesfell.Ontheotherhand,thetransientnatureofArlingtonspop-ulationmighthavecausedaninformationasymmetryabouttheexpectedneteffectsofpublicexpendituresonstadiums.Theseques-tionsprovideapossibleroadmapforfuture inquiry.REFERENCESBloom,H.S.,H.F.Ladd,andJ.Yinger.ArePropertyTaxesCapitalizedIntoHouseValues?inGeorgeR.Zodrow,ed.,LocalProvisionofPublicServices:TheTieboutModelafterTwenty-FiveYears.NewYork:AcademicPress,1983,145-63.Brown,G.M.Jr.,andH.O.Pollakowski.EconomicValueofShoreline.ReviewofEconomicsandStatis-tics,59,1977,272-78.Carlino,G.,andN.E.Coulson.CompensatingDifferen-tialsandtheSocialBene"tsoftheNFL.JournalofUrbanEconomics,56,2004,25-50..CompensatingDifferentialsandtheSocialBen-e"toftheNFL:Reply.JournalofUrbanEconomics

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