Closing Time: The Local Equilibrium Effects of Prohibition

Greg Howard, Arianna Ornaghi

Research output: Contribution to journalArticlepeer-review


How do different local policies in a federal system affect local land values, production, and sorting? We study the question exploiting a large historical policy change: U.S. Alcohol Prohibition in the early twentieth century. Comparing same- state early and late adopters of county dry laws in a difference-in-differences design, we find that early Prohibition adoption increased population and farm real estate values. Moreover, we find strong effects on farm productivity consistent with increased investment due to a land price channel. In equilibrium, the policy change disproportionately attracted immigrants and African-Americans.
Original languageEnglish (US)
Pages (from-to)792-830
Number of pages39
JournalJournal of Economic History
Issue number3
StatePublished - Sep 2021


  • Tiebout sorting
  • migration
  • land values
  • productivity
  • amenities
  • credit

ASJC Scopus subject areas

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • History


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