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date: 02 July 2022

Abstract and Keywords

This chapter investigates the relationships between municipal profiles and household location choice, a primary driver of land use change. Urban economics models typically attribute historical location patterns to rising incomes, falling commuting costs, and cheap new housing on the periphery. Local public finance models endogenize taxes and public services and emphasize preferences for alternative tax service bundles. Following a review of the related theory and literature, a case study from the Portland, Oregon, metropolitan area demonstrates how researchers might model the relationships between household location choice and municipal profile using spatially explicit data. This case study discusses data and estimation strategies, including reduced-form models, instrumental variable estimators, and treatment effect estimators. The fundamental challenge is identification in the presence of endogeneity.

Keywords: household location choice, municipal profile, land use, urban economics, local public finance, endogeneity

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