Dealing with eminent domain

Kitchens, Carl; Roomets, Alex

doi:10.1016/j.socec.2014.11.004

Cited by 15 publications

(12 citation statements)

References 25 publications

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“…The court fees were parameterized such that if the buyer took all four properties the available gains from trade would be completely consumed. Kitchens and Roomets (2015) found that prices were roughly the same under contingent contracts and eminent domain. They also found that efficiency was statistically indistinguishable across treatments.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 93%

“…Several laboratory studies have examined the holdout problem. The most relevant for our research are those by Cadigan, et al (2009Cadigan, et al ( , 2011, Swope, et al (2011), Collins and Isaac (2012), Parente and Winn (2012), Shupp, et al (2013), Cadigan, Schmitt and Swope (2014), Zillante, Read and Schwarz (2014), Kitchens and Roomets (2015) and Isaac, Kitchens and Portillo (2016). We summarize these studies in Table 1, listing the treatment variables the authors studied and the primary results.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

“…The only experimental study of eminent domain of which we are aware was conducted by Kitchens and Roomets (2015). In their experiments a buyer negotiated sequentially with four sellers who each had a $4 private use value for their properties.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

“…These results are informative and important, but Kitchens' and Roomets' (2015) experimental design omits several features of the land assembly problem. First, they did not incorporate costs of delayed assembly, so assembly failure was the only possible source of inefficiency in their contingent contracts treatment.…”

Section: Prior Studies Of Land Assemblymentioning

confidence: 99%

“…This has led some investigators to suggest that eminent domain may be a necessary tool for efficient land aggregation (Swope, et al 2011, Cadigan, et al 2011. However, to date the experimental study of efficiency under a regime of eminent domain versus secure property is limited to a single study (Kitchens and Roomets 2015) that omits several important features of the land assembly problem. Delay in assembly is costless in their experiments, court fees are born only by the buyer and determined exogenously, the court-determined price is known with certainty to all parties and assembly is efficient in all negotiations.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Who's holding out? An experimental study of the benefits and burdens of eminent domain

Winn

McCarter

2018

Journal of Urban Economics

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A substantial literature identifies seller holdout as a serious obstacle to land assembly, implying that eminent domain is an appropriate policy response. We conduct a series of laboratory experiments to test this view. We find that when there is no competition and no eminent domain, land assembly suffers from costly delay and failed assembly; participants lose 18.1% of the available surplus. Much of the inefficiency is due to low offers from the buyers ("buyer holdout") rather than strategic holdout among sellers. When buyers can exercise eminent domain the participants lose 18.6% of the surplus. This loss comes from spending money to influence the fair market price and forcing sellers to sell even when the sellers value the property more than the buyer. Introducing weak competition in the form of a less valuable substitute parcel of land reduces delay by 35.7% and virtually eliminates assembly failure, so that only 11.5% of the surplus is lost.

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Section: Prior Studies Of Land Assemblymentioning

confidence: 93%