How do land markets anticipate regulatory change? Evidence from Canadian Conservation policy
Branko Bošković and
No 9/2016, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics
Regulation often evolves, and affected consumers or firms may adjust their behavior in anticipation of potential changes to regulation. Using shifting land use regulation boundaries and oil lease prices from Canada, we estimate the effect of anticipated regulatory change on the value of land. We find that anticipated rezoning decreases the price of unregulated leases. Based on our estimates, not accounting for anticipation underestimates the total cost of the regulation by nearly one-third. Overall, the evidence suggests that anticipation effects are significant and that the cost of anticipated regulation is capitalized into land values.
Keywords: Regulation; anticipation; land values; zoning; oil leases; endangered species. (search for similar items in EconPapers)
JEL-codes: D44 Q30 Q52 Q58 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016-06-27, Revised 2016-08-17
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-reg
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Working Paper: How do Land Markets Anticipate Regulatory Change? Evidence from Canadian Conservation Policy (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhheco:2016_009
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