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On the origins of land use regulations: theory and evidence from us metro areas

  • Christian A. L. Hilber

    ()

    (London School of Economics)

  • Frédéric Robert-Nicoud

    ()

    (University of Geneva & Centre for Economic Policy Research (CEPR))

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 OLS as well as an IV approach that directly follows from our model we find strong and robust support for our predictions at the US metro area level. We conclude from our analysis that land use regulations are suboptimal.

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File URL: http://ieb.ub.edu/aplicacio/fitxers/2010/9/Doc2010-33.pdf
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Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2010/33.

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Length: 59 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:ieb:wpaper:2010/9/doc2010-33
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