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Chen & Yeh on the Economic Consequences of Eminent Domain

By Lawrence Solum

Daniel L. Chen and Susan Yeh (Duke University - School of Law and Harvard University - Harvard Law School) have posted The Economic Impacts of Eminent Domain on SSRN. Here is the abstract:

This paper evaluates prominent theories on the consequences of eminent domain. We exploit random assignment of appellate judges to three-judge panels and the fact that religious affiliation and public education of judges predict pro-plaintiff takings decisions to show a causal relationship between takings precedents and subsequent economic outcomes. Consistent with eminent domain encouraging development as property owners anticipate higher compensation, property prices rise in metro regions but fall in non-metro regions, where condemnation is less frequent. Eminent domain also spurs economic growth but exacerbates inequality as pro-defendant takings decisions increase local GDP, individual wages, and employment, but not for minorities.

Full post as published by Legal Theory Blog on June 29, 2010 (boomark / email).