Zachary Kessler


Ph.D. Candidate at George Mason University


Curriculum vitae


Economics


George Mason University



Endogenous Network Effect Generation through Political and Market Interaction: Evidence from Florida Home Values


Journal article


Zachary B. Kessler

Cite

Cite

APA
Kessler, Z. B. Endogenous Network Effect Generation through Political and Market Interaction: Evidence from Florida Home Values.

Chicago/Turabian
Kessler, Zachary B. “Endogenous Network Effect Generation through Political and Market Interaction: Evidence from Florida Home Values” (n.d.).

MLA
Kessler, Zachary B. Endogenous Network Effect Generation through Political and Market Interaction: Evidence from Florida Home Values.


Abstract
This paper argues that government and market institutions when interacting with one another lead to the generation of a network effect in property value. Using data from the Florida Department of Revenue on market value assessments of homes in 17 counties, I find that living in a basic governing institution, an HOA, increases the market value of an average home by 20% and creates larger neighborhoods. From this result, I estimate the size of the network effect as well as demonstrate through an agent-based model that given the size of this effect, the only way to exploit these gains is through market and political interaction. Using this model, I then show that the algorithmic framework necessary to maximize the welfare of those in the neighborhood is in fact the one present for both non-HOA and HOA situations given their average size.