The Neighborhood Effects of a Place-Based Policy—Causal Evidence from Atlanta’s Economic Development Priority Areas

Yuxi Luo, Zhaohua Zhang, Jun Zheng and Diane Hite
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Yuxi Luo: School of Economics and Management, Guangxi Normal University, Guilin 541004, China
Zhaohua Zhang: College of Economics and Management, Shandong Agricultural University, Tai’an 271018, China
Jun Zheng: College of Economics and Management, Shandong Agricultural University, Tai’an 271018, China
Diane Hite: Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, AL 36849, USA

Sustainability, 2021, vol. 13, issue 12, 1-16

Abstract: Place-based policies refer to government efforts to enhance the economic performance of an area within its jurisdiction. Applying various difference in differences strategies, this study evaluates the neighborhood effects of a place-based policy—the Economic Development Priority Areas (EDPA) of Atlanta, Georgia, USA. Since the census block groups are locally defined and the boundaries may change over time, we defined the neighborhoods by creating a set of 0.25-mile- diameter circles evenly distributed across Atlanta, and used the created buffers as the comparison unit. The empirical estimates showed that EDPA designation significantly reduced poverty rate and increased housing price of EDPA neighborhoods but had no beneficial effects on population size and employment rate. The heterogeneous analysis with respect to different initial economic status of the neighborhoods showed a relative larger and significant effect of EDPA designation on low-income neighborhoods. The increasing labor demand induced by EDPA designation in low-income neighborhoods attracted more population to migrate in and put upward pressure on housing prices. The estimation results are robust when replacing the 0.25-mile-diameter circle neighborhoods with 0.5-mile-diameter circle neighborhoods. Although we found some positive effects of the EDPA program in Atlanta, it would be misguided to assume similar effects occur in other areas implementing place-based policies.

Keywords: enterprise zone; difference in difference model; propensity score weighting; place-based policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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