Evidence-lite zone: The weak evidence behind the economic case against planning regulation

Economists have taken a strong interest in identifying the costs of land use regulation. But how good is their evidence? We examine three economic approaches to this question—regulatory intensity, zoning tax, and housing as opportunity—and summarise the type of evidence used and its weaknesses. Despite strong claims about enormous economic costs from planning and zoning, the evidence used in these approaches often relies on questionable assumptions to interpret the data. In most cases, there are realistic alternative economic theories that fit the data but generate quite different conclusions. Planners are cautioned against taking these results at face value and adopting these methods without considering the hidden assumptions.