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Discussion Paper Details

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Title: On the origins of land use regulations: Theory and evidence from US metro areas

Author(s): Christian A. L. Hilber and Frédéric Robert-Nicoud

Publication Date: December 2009

Keyword(s): housing supply, land ownership, land use regulations and zoning

Programme Area(s): International Trade and Regional Economics and Public Economics

Abstract: 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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Bibliographic Reference

Hilber, C and Robert-Nicoud, F. 2009. 'On the origins of land use regulations: Theory and evidence from US metro areas'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7604