An Evaluation of the Effectiveness of Louisville’s Enterprise Zone

Abstract

Louisville, Kentucky, has one of the oldest and largest enterprise zones (EZs) in the United States, yet until recently, the program had not been independently evaluated. Perhaps because no clearly superior evaluation methodology has emerged in the literature, the efficacy of EZ programs around the United States remains a contentious subject among scholars and policy makers alike. The authors take a quasi-experimental approach in evaluating Louisville’s EZ, using many different measures to give the program every chance to show success. Program tax exemptions and administrative costs of more than $55 million within the 13-year period studied are identified. The measures reveal that one of the EZ’s three objectives was obtained in one geographic subset of the zone, but not because of the EZ policy treatment. The research adds one more case study to the EZ literature and provides another indication of the questionable benefits of EZ programs.

Impacts of Enterprise Zone Policy on Industry Growth

“…Therefore, it is assumed that 1980 to 1990 and 1990 to 2000 are preprogram and postprogram periods; that is, without and with treatment periods. The study of Lambert and Coomes (2001) further confirms that no effects were observed over 1980 to 1990. Table 1 presents the qualification requirements and benefits for firms located inside an EZ.…”

“…Then, the section titled "Data Preparation" discusses several data-related issues and is followed by a shift-share (SS) analysis and results. The 1990 regional shifts are quite consistent with Lambert and Coomes (2001) in that industries in non-EZ areas tend to be more competitive than industries in EZ areas. A comparison of the 1990 and 2000 regional shifts, however, reveals that non-EZ areas are losing strength, whereas industries in EZ areas are growing stronger.…”

The impact of enterprise zone tax incentives on local property markets in England: who actually benefits?

“…There has been an extensive body of research into the impact of the policy in the USA. Examples include the work of Papke (1993Papke ( , 1994, Boarnet and Bogart (1996), Engberg and Greenbaum (1999), Bondonio and Engberg (2000), Lambert and Coombes (2001), Boarnet (2001), HUD (1997), O'Keefe (2004), Greenbaum and Engberg (2004), Rogers and Tao (2004), Busso and Kline (2008), Krupa and 68 S.A. Bond et al Noonan (2009) and Hanson (2009).…”

The Fiscal Impact of Local Property Tax Abatement in Indiana

“…In contrast, Lambert and Coomes (2001) provided a detailed analysis of Louisville's enterprise zone. They used a quasi-experimental analysis comparing various socioeconomic indicators for Louisville's EZ with similar regions in the same county and found that the Louisville EZ is not particularly effective.…”