Measuring the Stringency of Land-Use Regulation: The Case of China's Building-Height Limits

Jan Brueckner, Shihe Fu (), Yizhen Gu and Junfu Zhang

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops a new approach for measuring the stringency of a major form of land-use regulation, building-height restrictions, and it applies the method to an extraordinary dataset of land-lease transactions from China. Our theory shows that the elasticity of land price with respect to the foor-area ratio (FAR), an indicator of the allowed building height for the parcel, is a measure of the regulation's stringency (the extent to which FAR is kept below the free-market level). Using a national sample, estimation that allows this elasticity to be city-specific shows substantial variation in the stringency of FAR regulation across Chinese cities, and additional evidence suggests that stringency depends on certain city characteristics in a predictable fashion. Single-city estimation for the large Beijing subsample, where site characteristics can be added to the regression, indicates that the stringency of FAR regulation varies with certain site characteristics, again in a predictable way (being high near the Tiananmen historical sites). Further results using a different dataset show that FAR limits in Beijing are adjusted in response to demand forces created by new subway stops.

Keywords: Floor-area ratio; density restriction; urban development (search for similar items in EconPapers)
JEL-codes: R14 R52 (search for similar items in EconPapers)
Date: 2016-03-23
New Economics Papers: this item is included in nep-cna, nep-mkt, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://mpra.ub.uni-muenchen.de/70289/1/MPRA_paper_70289.pdf original version (application/pdf)

Related works:
Journal Article: Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits (2017)
Working Paper: Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits (2017)
Working Paper: Measuring the Stringency of Land-Use Regulation: The Case of China's Building-Height Limits (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70289

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