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An Econometric Analysis of Land Development with Endogenous Zoning

Author

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  • Van Butsic
  • David J. Lewis
  • Lindsay Ludwig

Abstract

Zoning is a widely used tool to manage residential growth. Estimating the effect of zoning on development, however, is difficult because zoning can be endogenous in models of land conversion. We compare three econometric methods that account for selection bias in a model of land conversion: a jointly estimated probit-logit model, propensity score matching, and regression discontinuity. Our results suggest that not accounting for selection bias leads to erroneous estimates. After correcting for selection bias we find that zoning has no effect on a landowner’s decision to subdivide in a rural Wisconsin county.

Suggested Citation

  • Van Butsic & David J. Lewis & Lindsay Ludwig, 2011. "An Econometric Analysis of Land Development with Endogenous Zoning," Land Economics, University of Wisconsin Press, vol. 87(3), pages 412-432.
    • Handle: RePEc:uwp:landec:v:87:y:2011:iii:1:p:412-432
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    Cited by:

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    2. Mariano Mezzatesta & David A. Newburn & Richard T. Woodward, 2013. "Additionality and the Adoption of Farm Conservation Practices," Land Economics, University of Wisconsin Press, vol. 89(4), pages 722-742.
    3. Holland, Margaret B. & de Koning, Free & Morales, Manuel & Naughton-Treves, Lisa & Robinson, Brian E. & Suárez, Luis, 2014. "Complex Tenure and Deforestation: Implications for Conservation Incentives in the Ecuadorian Amazon," World Development, Elsevier, vol. 55(C), pages 21-36.
    4. He, Zhichao & Zhao, Chunhong & Fürst, Christine & Hersperger, Anna M., 2021. "Closer to causality: How effective is spatial planning in governing built-up land expansion in Fujian Province, China?," Land Use Policy, Elsevier, vol. 108(C).
    5. KW Chau & Lawrence WC Lai & Mark H Chua, 2022. "Post-colonial conservation of colonial built heritage in Hong Kong: A statistical analysis of historic building grading," Environment and Planning B, , vol. 49(2), pages 671-686, February.
    6. James R. Meldrum, 2016. "Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 725-750, August.
    7. Daniel A. Brent, 2016. "Estimating Water Demand Elasticity at the Intensive and Extensive Margin," Departmental Working Papers 2016-06, Department of Economics, Louisiana State University.
    8. Zipp, Katherine Y. & Lewis, David J. & Provencher, Bill, 2017. "Does the conservation of land reduce development? An econometric-based landscape simulation with land market feedbacks," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 19-37.
    9. Daniel P. Bigelow & Todd Kuethe, 2020. "A Tale of Two Borders: Use‐Value Assessment, Land Development, and Irrigation Investment," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(5), pages 1404-1424, October.
    10. Bigelow, Daniel & Borchers, Allison, 2017. "Major Uses of Land in the United States, 2012," Economic Information Bulletin 263079, United States Department of Agriculture, Economic Research Service.
    11. Ferris, Jeffrey & David, Newburn, 2014. "Residential Development And The Effect Of Forest Conservation Policy," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170337, Agricultural and Applied Economics Association.
    12. Sandler, Austin M. & Rashford, Benjamin S., 2018. "Misclassification error in satellite imagery data: Implications for empirical land-use models," Land Use Policy, Elsevier, vol. 75(C), pages 530-537.
    13. Chun-Chang Lee & Yi-Xin Chen & Yun-Ling Wu & Wen-Chih Yeh & Chih-Min Liang, 2020. "Multilevel Analysis of the Pressure of Agricultural Land Conversion, Degree of Urbanization and Agricultural Land Prices in Taiwan," Land, MDPI, vol. 9(12), pages 1-21, November.
    14. Newburn, David & Ferris, Jeffrey, "undated". "The Effect of Downzoning on Spatial Development Patterns," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170446, Agricultural and Applied Economics Association.
    15. Piquer-Rodríguez, M. & Baumann, M. & Butsic, V. & Gasparri, H.I. & Gavier-Pizarro, G. & Volante, J.N. & Müller, D. & Kuemmerle, T., 2018. "The potential impact of economic policies on future land-use conversions in Argentina," Land Use Policy, Elsevier, vol. 79(C), pages 57-67.
    16. Woodward, Richard T. & Newburn, David A. & Mezzatesta, Mariano, 2016. "Additionality and reverse crowding out for pollution offsets in water quality trading," Ecological Economics, Elsevier, vol. 128(C), pages 224-231.
    17. Alexandra D Syphard & Avi Bar Massada & Van Butsic & Jon E Keeley, 2013. "Land Use Planning and Wildfire: Development Policies Influence Future Probability of Housing Loss," PLOS ONE, Public Library of Science, vol. 8(8), pages 1-12, August.
    18. Williamson, Samuel E., 2023. "Zoning with quantity restrictions for managing exurban development patterns," 2023 Annual Meeting, July 23-25, Washington D.C. 335866, Agricultural and Applied Economics Association.

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    More about this item

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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