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The Urban Impacts of the Endangered Species Act: A General Equilibrium Analysis

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  • Quigley, John M.
  • Swoboda, Aaron

Abstract

We consider the general equilibrium implications of environmental regulations which result in a reduction of otherwise profitable residential development. Critical habitat designation under the Endangered Species Act is an important example. If the regulations affect a significant amount of land, they may have important effects on the rest of the regional economy-increasing rents and densities on lands not subject to the regulation, causing the conversion of lands from alternative uses, increasing the net developed area in the region, and decreasing consumer welfare. We develop a flexible general equilibrium simulation of the economic effects of critical habitat designation, explicitly considering the distributional effects upon owners of different types of land and upon housing consumers. The results of our simulation show that the most significant economic effects of critical habitat occur outside of the designated area. The prices and rents of non-critical habitat lands increase significantly. Incomes are redistributed across landlords, and the well being of housing consumers is further affected through these linkages.

Suggested Citation

  • Quigley, John M. & Swoboda, Aaron, 2006. "The Urban Impacts of the Endangered Species Act: A General Equilibrium Analysis," Berkeley Program on Housing and Urban Policy, Working Paper Series qt639089c2, Berkeley Program on Housing and Urban Policy.
  • Handle: RePEc:cdl:bphupl:qt639089c2
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    1. John M. Quigley, 1984. "The Production of Housing Services and the Derived Demand for Residential Energy," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 555-567, Winter.
    2. Larry D. Singell & Jane H. Lillydahl, 1990. "An Empirical Examination of the Effect of Impact Fees on the Housing Market," Land Economics, University of Wisconsin Press, vol. 66(1), pages 82-92.
    3. C-M Lee & M Fujita, 1997. "Efficient Configuration of a Greenbelt: Theoretical Modelling of Greenbelt Amenity," Environment and Planning A, , vol. 29(11), pages 1999-2017, November.
    4. Oates, Wallace E. & Schwab, Robert M., 1997. "The Impact of Urban Land Taxation: The Pittsburgh Experience," National Tax Journal, National Tax Association, vol. 50(1), pages 1-21, March.
    5. C-M Lee & M Fujita, 1997. "Efficient configuration of a greenbelt: theoretical modelling of greenbelt amenity," Environment and Planning A, Pion Ltd, London, vol. 29(11), pages 1999-2017, November.
    6. Andrew R. Watkins, 1999. "Impacts of Land Development Charges," Land Economics, University of Wisconsin Press, vol. 75(3), pages 415-424.
    7. Jan K. Brueckner, 1990. "Growth Controls and Land Values in an Open City," Land Economics, University of Wisconsin Press, vol. 66(3), pages 237-248.
    8. Jeffrey E. Zabel & Robert W. Paterson, 2006. "The Effects of Critical Habitat Designation on Housing Supply: An Analysis of California Housing Construction Activity," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 67-95.
    9. Pines, David & Sadka, Efraim, 1986. "Comparative statics analysis of a fully closed city," Journal of Urban Economics, Elsevier, vol. 20(1), pages 1-20, July.
    10. Brueckner, Jan K., 1987. "The structure of urban equilibria: A unified treatment of the muth-mills model," Handbook of Regional and Urban Economics,in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 20, pages 821-845 Elsevier.
    11. Oates, Wallace E. & Schwab, Robert M., 1997. "The Impact of Urban Land Taxation: The Pittsburgh Experience," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 1-21, March.
    12. Quigley, John M., 2006. "Urban Economics," Berkeley Program on Housing and Urban Policy, Working Paper Series qt0jr0p2tk, Berkeley Program on Housing and Urban Policy.
    13. Beckmann, Martin J., 1969. "On the distribution of urban rent and residential density," Journal of Economic Theory, Elsevier, vol. 1(1), pages 60-67, June.
    14. Wheaton, William C., 1974. "A comparative static analysis of urban spatial structure," Journal of Economic Theory, Elsevier, vol. 9(2), pages 223-237, October.
    15. Thorsnes, Paul, 1997. "Consistent Estimates of the Elasticity of Substitution between Land and Non-Land Inputs in the Production of Housing," Journal of Urban Economics, Elsevier, vol. 42(1), pages 98-108, July.
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    Cited by:

    1. Nelson, Erik J. & Withey, John C. & Pennington, Derric & Lawler, Joshua J., 2017. "Identifying the impacts of critical habitat designation on land cover change," Resource and Energy Economics, Elsevier, vol. 47(C), pages 89-125.
    2. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, Elsevier.
    3. John M. Quigley & Aaron M. Swoboda, 2010. "Land use regulation with durable capital," Journal of Economic Geography, Oxford University Press, vol. 10(1), pages 9-26, January.
    4. repec:oup:renvpo:v:12:y:2018:i:1:p:69-91. is not listed on IDEAS
    5. David Sunding, 2014. "Conserving Endangered Species through Regulation of Urban Development: The Case of California Vernal Pools," Land Economics, University of Wisconsin Press, vol. 90(2), pages 290-305.
    6. Thomas Coisnon & Walid Oueslati & Julien SalaniƩ, 2012. "Agri-environmental policy and urban sprawl patterns: A general equilibrium analysis," Working Papers halshs-00753221, HAL.
    7. Niels Vermeer & Wouter Vermeulen, 2011. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis," CPB Discussion Paper 178, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Greenstone, Michael & Gayer, Ted, 2009. "Quasi-experimental and experimental approaches to environmental economics," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 21-44, January.
    9. Kok, Nils & Monkkonen, Paavo & Quigley, John M., 2014. "Land use regulations and the value of land and housing: An intra-metropolitan analysis," Journal of Urban Economics, Elsevier, vol. 81(C), pages 136-148.

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