EVIDENCE ON PUBLIC AND PRIVATE INVESTMENTS IN COMMUNITIES

Abstract

In this dissertation, I study how communities respond to local policy and investment changes, using evidence from public libraries and place-based policies to understand how public and private interventions impact community behavior, institutional outcomes, and local economic development. In the second chapter, I estimate the effect of eliminating overdue fines on library usage and finances. Since 2010, a growing number of public libraries have eliminated fines for overdue materials, citing concerns about access. Using panel data of Illinois public libraries from 2007 to 2019 and a staggered difference-in-differences framework, I find that removing overdue fines increases library visits and circulation, with suggestive evidence that it is driven by libraries in lower-income communities. I find no evidence of negative financial impacts, as lost fine revenue is small relative to total operating income. These findings suggest that fine elimination can improve efficiency in library use without compromising financial sustainability. In the third chapter, I study the effects of philanthropic grants from the Bill and Melinda Gates Foundation on public libraries, examining their impact on computer spending and access, library service availability and use, and library spending. Between 1997 and 2003, the Foundation awarded grants to over 4,500 library systems across the US to support public access to computers. Using panel data and a staggered difference-in-difference design, I find limited evidence of any impact to libraries across outcomes considered. The grants may have increased the number of public access computers, but consistent pre-trends in outcomes make exact interpretation of this and all outcomes challenging. At best, the results suggest that philanthropic investments of this variety may address infrastructure deficits in the short run but have more limited effects on long-term public service usage. In the final chapter, I study the impact of the New Markets Tax Credit (NMTC) program, a place-based policy, on local development outcomes. Established in 2000, the NMTC program provides tax credits to incentivize private investment in economically distressed communities. Using comprehensive data on NMTC-financed projects and a fuzzy regression discontinuity design, I find limited evidence that the program meaningfully changed local economic conditions. While some outcomes show statistically significant changes in some years, these effects are not consistent over time or easily interpreted. Heterogeneity analyses very tentatively suggest that if there are effects, that they may be stronger in higher-vacancy and lower-income tracts, but the variability in estimates and the strength of the first stage warrant caution. Overall, the findings highlight the challenges of identifying local effects of place-based investments and suggest that NMTC may, in many cases, have limited or no measurable impact.