JUE Insight: Measuring the Stringency of Land Use Regulation Using a Shadow Price Approach

Junfu Zhang

Journal of Urban Economics, 2023, vol. 133, issue C

Abstract: I propose a shadow price approach to measuring the stringency of land use regulation. A regulation is considered more restrictive if the land developer is willing to pay a larger amount for a marginal relaxation of the regulation. I show that existing theory-based measures of land use stringency are either equivalents or variations of this shadow price measure. Using data from China, I demonstrate that it is possible to compare the stringency of two kinds of land use regulation, a key advantage of this shadow price approach.

Keywords: Land use; Regulation; Stringency; Shadow price (search for similar items in EconPapers)
JEL-codes: R14 R52 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:133:y:2023:i:c:s0094119022000389

DOI: 10.1016/j.jue.2022.103461

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