Do cultural districts spur urban revitalization: Evidence from Louisiana

Abstract

In the past two decades, cultural districts have become a popular instrument to encourage urban revitalization. Districts typically receive support such as grants, investments, or tax credits and, in this sense, are a variation of place-based economic development policies. In this paper, we examine the effect of state-designated cultural districts on transaction-level residential real estate prices in the metropolitan region of Lafayette, Louisiana. Using a difference-in-differences identification strategy that adjusts for staggered treatment timing, we find that residential properties within districts sell for 7% more after certification relative to nearby comparison group properties. The results are robust to extreme sale prices, alternative samples, and recently developed randomization inference techniques. Our results add to the literature showing that place-based policies can spur economic revitalization if they are carefully targeted toward amenities that residents value.