Pricing and eminent domain takings: A case study of residential property in Las Vegas, Nevada
This case study tests whether compensation for eminent domain takings equals estimated market prices for residential property located near McCarran Airport in Clark County Nevada. The hedonic model provides evidence that takings compensation was often less than estimated market price, a discount was paid to owners of smaller homes, and a premium was paid to owners of larger homes. Although data constraints, estimation issues and lack of previous studies hamper broad conclusions, the robust data set, consistency of model specification results, and the explanatory power of economic thought is evident in these results. The results are somewhat surprising in that McCarran International Airport is very much an integral aspect of Las Vegas. It is recommended that hedonic analysis be considered as a component of estimating fair market value. Further research will hopefully expand this preliminary effort and eventually improve understanding and executing the responsibilities of eminent domain.
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