Foreclosures and local government budgets

摘要

Foreclosures have been shown to have a negative financial impact on borrowers, lenders, and neighbors. It has also been argued that they have important negative effects on the budgets of local governments, but the only econometric evidence on this is provided by Alm, Buschman and Sjoquist (2014) foreclosures in this journal. They limit their analysis to the revenue side of the budget and find important effects. As a complement to their work, we argue and demonstrate using a unique 15-year panel of Florida counties that foreclosures also have important effects on local governments' expenditures. Published by Elsevier B.V.