Land-use regulation and housing supply elasticity: evidence from France

Guillaume Chapelle, J.B. Eyméoud and Clara Wolf

No 2023-08, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This study gathered original data on French metropolitan statistical areas to estimate and decompose their inverse housing supply elasticity, describing how housing prices react to demand shocks. Our findings confirm that French cities are highly inelastic, with an estimated average supply elasticity of 0.5. Furthermore, leveraging a nationwide regulation protecting historical monuments as an instrument, we found that land-use regulations controlled by local authorities appear to be mainly responsible for this low supply elasticity.

Keywords: housing supply; land use regulation; real estate; urban growth. (search for similar items in EconPapers)
JEL-codes: R21 R31 R52 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-agr, nep-eur and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2023-08

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