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Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits

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Listed:
  • Jan K. Brueckner

    (UC Irvine)

  • Shihe Fu

    (WangYanan Institute for Studies in Economics, Xiamen University)

  • Yizhen Gu

    (Institute for Economic and Social Research, Jinan University)

  • Junfu Zhang

    (Clark University)

Abstract

This paper develops a new approach for measuring the stringency of a major form of land use regulation, building height restrictions, and applies it to an extraordinary data set of land-lease transactions from China. Our theory shows that the elasticity of land price with respect to the floor area ratio (FAR), a building height indicator, is a measure of the regulation's stringency (the extent to which FAR is kept below the free-market level). Using a national sample, estimation allowing this elasticity to be city-specific shows variation in the stringency of FAR regulation across Chinese cities. Single-city estimation for Beijing shows that stringency varies with site characteristics.

Suggested Citation

  • Jan K. Brueckner & Shihe Fu & Yizhen Gu & Junfu Zhang, 2017. "Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits," The Review of Economics and Statistics, MIT Press, vol. 99(4), pages 663-677, July.
  • Handle: RePEc:tpr:restat:v:99:y:2017:i:4:p:663-677
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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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