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Title:Economic analysis of a land value capture system used to finance road infrastructure: The case of Bogota, Colombia
Author(s):Ortiz, Alexandra
Doctoral Committee Chair(s):Knaap, Gerrit J.
Department / Program:Urban and Regional Planning
Discipline:Regional Planning
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Political Science, Public Administration
Urban and Regional Planning
Abstract:Bogota is a city that faces many problems, among them severe deficiencies in its road infrastructure. Financing of road infrastructure has been possible in part through a land value capture mechanism called "valorization charges". The purpose of this thesis is to analyze this financial tool from an economic perspective, using information from the 1992-1994 infrastructure plan of Bogota. A mathematical model is devised to approach this problem. Although valorization has not been specifically modeled in an urban economics setting, such a model derives from optimum taxation and optimum public good pricing theories. From the model two equations are obtained: the optimum valorization equation and the capitalization equation. Data on property values, income, characteristics of the properties, access measures, and valorization at individual property level, were collected in Bogota for two periods (before and after the infrastructure project). Based on the empirical study, it is found that: (1) Valorization charges depend on income and property values in the way predicted by the optimum model. (2) Valorization charges are not capitalized into property values. (3) Individual benefits estimated a-priori by the agency in charge of valorization are incorrectly predicted. (4) On average, the net increase in property values generated by the road infrastructure project 92-94 is of 46 percent beyond inflation effects.
Issue Date:1996
Rights Information:Copyright 1996 Ortiz, Alexandra
Date Available in IDEALS:2011-05-07
Identifier in Online Catalog:AAI9712389
OCLC Identifier:(UMI)AAI9712389

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