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Abstract
Eminent domain (ED), the legal right to acquire property by forced
rather than voluntary exchange is often used in the assembly of contiguous
properties to accomplish the siting of facilities having a public use
characteristic. To gauge the relative economic efficiency of ED, a model is
proposed which relies in great part on identification of distributional
phenomena in both market and ED acquisitions. Analyzed data suggest that
distribution-related issues such as holdout behavior, bearing of
transactions costs, and relocation compensation are important determinants
of ED's efficiency.