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Comparative urban institutions and intertemporal externality: a revisit of the Coase conjecture


  • Deng, Feng


Coase originally formulated his conjecture about intertemporal price competition in the context of a land market, but it has been applied almost exclusively to non-spatial markets. This paper revisits the Coase Conjecture in the context of land development and urban institutions. I compare four institutional arrangements based on the combination of land tenure options and local governance forms: private/rental, public/rental, private/owner and public/owner. The two-period model developed in this paper shows that homeownership may result in more land development than leasehold. Numeric examples suggest (1) public/owner, i.e., the common form of government providing collective goods, may be efficient for more uniform distribution of consumer; (2) rentals can be desirable for “poor” communities; (3) private/owner, such as CID (Common Interest Development) and condominium, is more efficient for “rich” communities; (4) restrictive zoning reduces social surplus, and “rich” community may adopt more restrictive measures. These results may help explain why public institutions are dominant in urban setting and why most private communities are small and located in the suburbs.

Suggested Citation

  • Deng, Feng, 2003. "Comparative urban institutions and intertemporal externality: a revisit of the Coase conjecture," MPRA Paper 2223, University Library of Munich, Germany, revised 08 Feb 2007.
  • Handle: RePEc:pra:mprapa:2223

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    References listed on IDEAS

    1. Yoram Barzel & Tim R. Sass, 1990. "The Allocation of Resources by Voting," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 745-771.
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    More about this item


    monopoly; durability; bundling; land; local collective good; public good; private community; urban institutions;

    JEL classification:

    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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