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Game of Zones: The Economics of Conservation Areas

Gabriel Ahlfeldt, Kristoffer Moeller, Sevrin Waights and Nicolai Wendland

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: Provided there are positive external benefits attached to the historic character of buildings, owners of properties in designated conservation areas benefit from a reduction in uncertainty regarding the future of their area. At the same time, the restrictions put in place to ensure the preservation of the historic character limit the degree to which properties can be altered and thus impose a cost to their owners. We test a simple theory of the designation process in which we postulate that the optimal level of designation is chosen so as to Pareto-maximize the welfare of local owners. The implication of the model is that a) an increase in preferences for historic character should increase the likelihood of a designation, and b) new designations at the margin should not be associated with significant house price capitalization effects. Our empirical results are in line with these expectations.

Keywords: Designation; difference-in-difference; RDD-DD; England; gentrification; heritage; property value (search for similar items in EconPapers)
JEL-codes: H23 H31 R40 R58 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-env and nep-ure
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Citations: View citations in EconPapers (8)

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http://cep.lse.ac.uk/pubs/download/sercdp0143.pdf (application/pdf)

Related works:
Working Paper: Game of zones: the economics of conservation areas (2013) Downloads
Working Paper: The economics of conservation area designation (2013) Downloads
Working Paper: On prisoner's dilemmas and gilded cages: The economics of heritage preservation (2012) Downloads
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