The role of demand in land re-development

Felipe Carozzi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Vacant, previously-developed land in cities can generate negative externalities on surrounding areas, and is often the target of policies to promote re-development. This paper provides estimates of the price sensitivity of land re-development, a crucial parameter for the success of these policies. My estimates measure how prices affect long-run conversion of unused or underused previously developed land in England. The empirical strategy uses school test scores and admission district boundaries in a boundary discontinuity design to generate variation in housing demand that is orthogonal to re-development costs. Results show that the probability of re-development is effectively sensitive to housing prices. Estimates indicate that a 1% increase in prices leads to a 0.07 percentage point reduction in the fraction of hectares containing brownfield land. Price differences or substantial subsidies could lead to a significant amount of re-development in the long run. This is confirmed by observed land use changes between 2007 and 2011 being disproportionately concentrated in high price areas.

Keywords: land re-development; Brownfields; land supply (search for similar items in EconPapers)
JEL-codes: R14 R31 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2020-05-01
New Economics Papers: this item is included in nep-agr and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Urban Economics, 1, May, 2020, 117. ISSN: 1095-9068

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103690

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