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Market thinness, income sorting and leapfrog development across the urban-rural gradient

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  • Chen, Yong
  • Irwin, Elena G.
  • Jayaprakash, Ciriyam
  • Irwin, Nicholas B.

Abstract

This paper investigates the conditions under which thin residential land markets generate an incentive for leapfrog development. We provide empirical evidence that suggests the presence of thinly traded land market in exurban areas. We develop a spatial model of an exurban land market that incorporates this key feature and show the conditions under which leapfrog development emerges. Specifically, given increasing market thinness with distance and a limited number of heterogeneous buyers, higher income households are able to bid down land prices at farther away locations. This creates an incentive for leapfrog development and leads to a positive income gradient, which we also confirm empirically.

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  • Chen, Yong & Irwin, Elena G. & Jayaprakash, Ciriyam & Irwin, Nicholas B., 2017. "Market thinness, income sorting and leapfrog development across the urban-rural gradient," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 213-223.
    • Handle: RePEc:eee:regeco:v:66:y:2017:i:c:p:213-223
    DOI: 10.1016/j.regsciurbeco.2017.07.001
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    Cited by:

    1. Chen, Yong, 2020. "Effects of development tax on leapfrog sprawl in a thinly traded land market," Land Use Policy, Elsevier, vol. 92(C).
    2. Xiaoqiang Shen & Xiangdong Wang & Zhou Zhang & Luocheng Fei, 2021. "Does non-conforming urban development mean the failure of zoning? A framework for conformance-based evaluation," Environment and Planning B, , vol. 48(5), pages 1279-1295, June.
    3. Manon Glockmann & Yunfei Li & Tobia Lakes & Jürgen P Kropp & Diego Rybski, 2022. "Quantitative evidence for leapfrogging in urban growth," Environment and Planning B, , vol. 49(1), pages 352-367, January.

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    More about this item

    Keywords

    R14; R31; C63; Land market; Residential land use; Urban sprawl; Auction; Housing markets; Thin market;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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