The Welfare Effects of Greenbelt Policy: Evidence from England

Hans Koster

The Economic Journal, 2023, vol. 134, issue 657, 363-401

Abstract: I measure the economic effects of greenbelts that prohibit new construction beyond a predefined urban fringe and therefore act as urban growth boundaries. I focus on England, where 13% of the land is designated as greenbelt land. I provide reduced-form evidence and estimate a quantitative equilibrium model that includes amenities, housing supply, a traffic congestion externality, agglomeration forces, productivity and household location choices. Greenbelt policy generates positive amenity effects, but also strongly reduces housing supply. I find that greenbelts increase welfare because amenity effects are sufficiently strong. At the same time, however, greenbelts decrease housing affordability by limiting housing supply.

Date: 2023
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Journal Article: The Welfare Effects of Greenbelt Policy: Evidence from England (2024)
Working Paper: The Welfare Effects of Greenbelt Policy: Evidence from England (2020)
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