Nurturing neighborhoods, cultivating local businesses: The effects of amenities-to-infrastructure spending on new business licenses in Chicago's wards

Abstract

Based on public choice theory, this study examines how the relative focus on amenities-to-infrastructure spending is associated with the concentration and the subsequent volume of new business licenses. Using data from the Aldermanic Menu Program and business license records in Chicago, the key insight from our study suggests a "seeding and spreading" effect, where increased amenities-to-infrastructure spending is associated with a less diverse distribution of new business licenses, but that in turn, is associated with an increase in the overall volume of new businesses licenses in the following period. The effect sizes are small. The study contributes to the literature on urban economics and entrepreneurship by extending the concept of amenity-focused public spending.