Three essays in cultivating regional growth: brownfields and charter schools
Date
2023
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Abstract
This dissertation is comprised of three chapters focused on two important factors in cultivating regional growth. The first factor considered in chapter one is potential barriers to contaminated land reuse. As cities and towns grow, over time the stock of land within an area can be impacted by prior land use. A property which currently has a contamination issue from prior use which must be remedied before the land may be used in the future, whether for production or settlement, is called a brownfield. In this chapter we employ a survey of real estate professionals, and find developers require an additional risk premium on top of their normal rate of return on investment to incentivize them to invest in a brownfield. Importantly, this risk premium is found to be in excess of cleanup costs. Informed by the results of the survey analysis, a theoretical framework is used to explore the implications of this risk premium. We show this risk premium generated by information asymmetries potentially leads to inefficiency in the market for real estate and can perpetuate a cycle of underdevelopment due to a first mover problem. The redevelopment of this land is important, as these brownfield properties are typically located in the urban core of cities and towns and if not remediated can leave potentially productive swaths of land fenced off while expansion occurs in a sprawling manner on the fringes. The second factor in cultivating regional growth considered in chapters two and three of this dissertation is the role of educational alternatives. Specifically, I focus on the determinants of charter school formation and growth. Education quality and availability has been shown to be important in determining economic growth and migration patterns. Specifically, a strong education system can be viewed as an amenity to households and firms debating moving to a particular locale. Charter schools are publicly funded, privately run institutions crafted first as a pilot program for innovation, and more recently as a substitute or competitor for public schools. While the efficacy of charter schools has been heavily researched and remains controversial, little work has focused on the determinants of demand for the schools themselves. Chapter two builds on a small existing literature to provide light on what factors outside of direct measures of educational quality affect the creation rate of charter schools. Using a panel of core based statistical areas over the period 2006-2015, this analysis finds evidence that the composition of industry within a Core Based Statistical Area is related to the rate at which new charter schools are created, with more technical employment associated with a greater demand for alternative school options. The connection between industry and charter school creation is further explored by measuring the impact of intra-industry entrepreneurship on charter school proliferation, where findings suggest that higher levels of entrepreneurship within an CBSA is correlated with a higher charter school formation rate. Chapter three further explores the connection between charter schools and their interconnectivity with the broader economy. Posed as a method of returning education to the private market, charter schools are considered to be more exposed to market conditions, potentially more nimble to changing conditions and methodologies, but also potentially functioning in a more volatile market where school closings can occur more easily. This chapter uses the impact of the 2007 financial crisis to determine if charter schools were impacted differently than public schools. Using a nationally representative sample and aggregating to the Core Based Statistical Area, I find both traditional public and charter schools experienced small decreases in revenue but were largely sheltered from recessionary forces due to Federal intervention. Using a difference-in-differences approach I find that charter schools experienced both an increased rate of openings and an increase in the stock during the Great Recession. I attribute this effect to the decreased opportunity cost of charter school entrepreneurship. However, areas most affected by the Great Recession experienced a decrease in the stock of charter schools, as the challenges associated with opening a new school likely increased and lowered the viability relative to education entrepreneur's next best venture.
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Subject
charter school
brownfield