The difference-in-differences (DID) approach that identifies the capitalization of amenities through changes in housing prices has been widely used in the literature of hedonic estimation in the past decade. However, concerns have been raised about how to interpret the estimated capitalization...

We examine the effect of interstate differences in income taxes on commuting times. Our theoretical model introduces a border into a model of an urban area and shows that differences in average tax rates distort commuting patterns, but the sign of the effect depends on whether taxes are...