Urban growth boundary and subway development: A theoretical model for estimating their joint effect on urban land price

Ronghui Tan and Shuxian Xu

Land Use Policy, 2023, vol. 129, issue C

Abstract: To control urban sprawl, land use planners in China need to development-limiting boundaries. As a type of development-limiting boundary, urban growth boundary (UGB) has been adopted by the local governments of some Chinese megacities. Although the main goal of the UGB is to contain urban sprawl, its effects on land and housing price have attracted the attention of planners and scholars worldwide. In this study, we present a theoretical model that considers the effects of UGB implementation and transport development on urban land price. In this model, UGB is hypothesized to increase the price of urban land inside the boundary, whereas transport development is expected to reduce it. Using road network data, we find that per-unit travel cost declines due to the development of the transport network. We control for such an effect and apply difference-in-difference (DID), spatial DID (SDID), and geographically weighted regression models along with land sales data from 2005 to 2019 to quantify the effect of UGBs in Wuhan. Results show that the UGBs in three districts significantly increase the relative prices of urban land inside the boundary compared with their counterparts outside these UGBs. However, this effect is not observed in all central districts.

Keywords: Urban growth boundary; Urban land price; Travel cost; Difference-in-difference model (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:129:y:2023:i:c:s0264837723001072

DOI: 10.1016/j.landusepol.2023.106641

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