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The Welfare Effects of Greenbelt Policy: Evidence from England

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  • Koster, Hans

Abstract

I measure the economic effects of greenbelts that prohibit new construction beyond a predefined urban fringe and therefore act as urban growth boundaries. I focus on England, where 13% of the land is designated as greenbelt land. I provide reduced-form evidence and estimate a quantitative equilibrium model that includes amenities, housing supply, a traffic congestion externality, agglomeration forces, productivity, and household location choices. Greenbelt policy generates positive amenity effects, but also strongly reduces housing supply. I find that greenbelts increase welfare because amenity effects are sufficiently strong. At the same time, however, greenbelts decrease housing affordability by limiting housing supply.

Suggested Citation

  • Koster, Hans, 2020. "The Welfare Effects of Greenbelt Policy: Evidence from England," CEPR Discussion Papers 14546, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14546
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    More about this item

    Keywords

    Housing; Supply constraints; Greenbelts; Urban growth boundary; Open space; Gravity;
    All these keywords.

    JEL classification:

    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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