The Welfare Effects of Greenbelt Policy: Evidence from England

Hans Koster

No 14546, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Housing; Supply constraints; Greenbelts; Urban growth boundary; Open space; Gravity (search for similar items in EconPapers)
JEL-codes: H41 R13 R30 R41 R52 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-ure
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Related works:
Journal Article: The Welfare Effects of Greenbelt Policy: Evidence from England (2024)
Journal Article: The Welfare Effects of Greenbelt Policy: Evidence from England (2023)
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