PT  - JOURNAL ARTICLE
AU  - Groves, Jeremy R.
AU  - Rogers, William H.
TI  - Effectiveness of RCA Institutions to Limit Local Externalities: Using Foreclosure Data to Test Covenant Effectiveness
AID  - 10.3368/le.87.4.559
DP  - 2011 Nov 01
TA  - Land Economics
PG  - 559--581
VI  - 87
IP  - 4
4099  - http://le.uwpress.org/content/87/4/559.short
4100  - http://le.uwpress.org/content/87/4/559.full
SO  - Land Econ2011 Nov 01; 87
AB  - Residential community associations (RCAs) are said to be an efficient institutional agreement to limit local spillovers. While several studies have identified a positive marginal effect of RCA rules, none have explicitly measured the effectiveness of these institutions to limit local externalities. This study measures this effectiveness by estimating how the direct and spillover price impacts caused by foreclosure differ by RCA status. Using a spatial hedonic model that controls for selection bias using propensity score methods and coarsened exact matching we find that foreclosed RCA properties experience smaller direct foreclosure discounts and produce smaller spill-over effects than their non-RCA counterparts. (JEL D62, R31)