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An Econometric Analysis of Land Development with Endogenous Zoning

Author

Listed:
  • 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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    References listed on IDEAS

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    1. Lewis, David J. & Provencher, Bill & Butsic, Van, 2009. "The dynamic effects of open-space conservation policies on residential development density," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 239-252, May.
    2. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    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. David A. Newburn & Peter Berck, 2006. "Modeling Suburban and Rural-Residential Development Beyond the Urban Fringe," Land Economics, University of Wisconsin Press, vol. 82(4), pages 481-499.
    5. 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.
    6. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767, April.
    7. 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.
    8. Carmen Carrión-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.
    9. 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.
    10. McConnell, Virginia & Walls, Margaret & Kopits, Elizabeth, 2006. "Zoning, TDRs and the density of development," Journal of Urban Economics, Elsevier, vol. 59(3), pages 440-457, May.
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    Citations

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    Cited by:

    1. 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.
    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. 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.
    5. 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.
    6. 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.
    7. 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.

    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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