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On the Origins of Land Use Regulations: Theory and Evidence from US Metro Areas

  • Christian A. L. Hilber
  • Frédéric Robert-Nicoud

We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group (via increasing property prices) but hurt the latter (via increasing development costs). More desirable locations are more developed and, as a consequence of political economy forces, more regulated. Using an IV approach that directly follows from our model we find strong and robust support for our predictions. The data provide weak or no support for alternative hypotheses whereby regulations reflect the wishes of the majority of households or efficiency motives.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0964.

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Date of creation: Dec 2009
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Handle: RePEc:cep:cepdps:dp0964
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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