Efficient growth boundaries in the presence of population externalities and stochastic rents

Jyh-Bang Jou

The Quarterly Review of Economics and Finance, 2012, vol. 52, issue 4, 349-357

Abstract: This paper investigates how the uncertain demand for urban land affects the design of efficient growth boundaries. Landowners decide both the timing of conversion and the capital intensity when facing a population externality that decreases urban rents. While growth controls induce landowners to convert their land earlier than planned, these controls do not affect their intensity choices. Growth controls also raise the prices of both urban and undeveloped land. To accommodate the uncertain demand for urban land, the regulator should slacken the growth boundary control once urban rents pass historically high levels. In general, the regulator should also tighten the control when urban rents become volatile.

Keywords: Growth boundaries; Population externalities; Real options; Stackelberg game; Transportation taxes (search for similar items in EconPapers)
JEL-codes: G13 H23 R52 R58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:52:y:2012:i:4:p:349-357

DOI: 10.1016/j.qref.2012.10.004

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