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An Econometric Analysis of Land Development with Endogenous Zoning

  • Van Butsic
  • David J. Lewis
  • Lindsay Ludwig

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.

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Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 87 (2011)
Issue (Month): 3 ()
Pages: 412-432

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Handle: RePEc:uwp:landec:v:87:y:2011:iii:1:p:412-432
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  1. Newburn, David A. & Berck, Peter, 2006. "Modeling Suburban and Rural-Residential Development Beyond the Urban Fringe," 2006 Annual meeting, July 23-26, Long Beach, CA 21068, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Lewis, David J. & Provencher, Bill & Butsic, Van, 2008. "The Dynamic Effects of Open-Space Conservation Policies on Residential Development Density," Staff Paper Series 522, University of Wisconsin, Agricultural and Applied Economics.
  3. Antonio Bento & Charles Towe & Jacqueline Geoghegan, 2007. "The Effects of Moratoria on Residential Development: Evidence from a Matching Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1211-1218.
  4. Justin McCrary, 2007. "Manipulation of the Running Variable in the Regression Discontinuity Design: A Density Test," NBER Technical Working Papers 0334, National Bureau of Economic Research, Inc.
  5. Carmen Carri�n-Flores & Elena G. Irwin, 2004. "Determinants of Residential Land-Use Conversion and Sprawl at the Rural-Urban Fringe," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 889-904.
  6. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, October.
  7. Elena G. Irwin, 2002. "Interacting agents, spatial externalities and the evolution of residential land use patterns," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 31-54, January.
  8. Nancy Bockstael, 2008. "An Empirical Examination of the Timing of Land Conversions in the Presence of Farmland Preservation Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 613-626.
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