The market value of political partisanship: Quasi-experimental evidence from municipal elections

Do different political parties implement divergent policies which impact the citizens’welfare? The overheated debate notwithstanding, it is far from clear if this is really the case.Whereas current literature focuses on specific policy outcomes, we use real estate prices to eval-uate the economic impact of municipal policies. Using a new dataset on Italian municipal elec-tions and real estate prices, we employ a regression di scontinuity (RD) approach to detect thecausal effect of a change in municipal majorities. We find no difference between the effectsof the policies enacted by left and right-wing parties. Further evidence from municipal balancesheets confirms that the observed difference s in fiscal behaviour are hardly relevant for realestate capitalized values.