Abstract
The paper examines the impact of tax increment financing (TIF) on the value of industrial properties in Chicago. Because TIF designation may be self-selected, a two stage procedure is used to estimate the influence of TIF. The authors find that the value of industrial parcels located in mixed-use TIF districts (i.e. those that also contain commercial or residential properties) is higher than that of similar parcels that are not located in a TIF district. However, the value of industrial parcels that are located in homogeneous industrial use TIF districts is no higher and in some specifications is lower than that of similar parcels not located in a TIF district. These divergent results may be best explained by industrial parcel owners' desire to convert their properties to non industrial uses.
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