Theoretical
Mainly the Rosen Roback.
Empirical Papers
Assessing the Incidence and Efficiency of a Prominent Place Based Policy
The results are, as predicted in the theoretical model Rosen Roback, if the empowerment zone has increased the attraction of the zone, it should leads to
- Increase in population
- Increase in rents
- Wage bid down
But the results shows there’s no significant increase in population, but increase in wage and jobs.
One of the possible reasons is that although job opportunity has increased, the social welfare has not, such as schools, hospitals, etc. These lead people be willing to commute to work. But they don’t want to live here.
Evaluating State and Local Business Incentives
Why firm-specific deals are attractive to policymakers?
What are the challenges?
- Information is hidden by firms
- trade off between budget.
3 -digit residual