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Bombs, boundaries and buildings

  • Koster, Hans R.A.
  • van Ommeren, Jos
  • Rietveld, Piet

Many cities apply planning policies to protect a valuable building stock. These policies may have adverse side-effects. We aim to estimate the costs of within-city regulatory restrictions for house owners. To avoid endogeneity issues with respect to supply restrictions, we employ a regression-discontinuity approach using a World War II bombing boundary within the city of Rotterdam. Conditional on amenities and housing attributes, in the bombed area (where fewer restrictions apply) house prices are about 10% higher. This implies regulatory costs of about 0.72millionEuroperhectare for the area under consideration. The results suggest that house owners' benefits should be substantial to compensate for the costs of additional restrictions.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 4 ()
Pages: 631-641

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Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:631-641
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

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