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Endnotes

1 - Information obtained from the World-Wide-Web site of The EZ Project at the University of Richmond School of Law, http://www.richmond.edu/~ezproj/statelaw.htm.

2 - Wolf (1990) indicates that the most common tax abatements utilized in enterprise zones are property tax exemptions for improvements to property, income tax credits for business investment and employment of economically disadvantaged persons, and sales tax exemptions for materials and equipment purchased and utilized by enterprise zone businesses.

3 - Peterson (1981) and Jud and Parkinson (1990) suggest that local development policies arise due to the community spirit of local political leaders. According to this perspective, the primary benefit of development policies like enterprise zones is found in protecting the community tax base and creating jobs for current and future residents of the community. As a result, development policies may be politically popular if community residents also perceive that these policies increase local job opportunities and maintain the fiscal capacity of the community to provide a high level of public services.

4 - While the capitalization (and hedonic pricing) literature has focused almost entirely on housing or residential property values, the applicability of the model to commercial and industrial property and firm location choice is apparent. Linneman (1982, 80-81) observed that demand for industrial sites could be modeled like demand for household locations has so often been modeled. "[F]irms can be viewed as demanding various location-specific traits [including, for instance, local government public services and property taxes]."

5 - The model is an adaptation of a model explaining the effect of property taxes on capital intensity of development by Shoup (1978).

6 - This result was statistically significant at the 0.154 level of significance.

7 - Engberg and Greenbaum (1999) select housing values to measure the efficacy of enterprise zone incentive programs because of the availability of housing value data through the decennial census. Also, if enterprise zones do spur development, they expect the zones to have an effect on housing values. Housing values are expected to increase due to increased demand for housing by workers migrating into the zones or by commercial entities desiring to transform housing within the zones into land for commercial use.

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