Abstract:
This dissertation consists of three papers on land use economics and policies.
The first two papers focus primarily on local land use policies and urban development.
The third paper addresses the question how environmental amenities affect
households' residential choices in a metropolitan area.
In the first paper, an option value approach is used to model land development
decisions under uncertainty. A land use conversion model is estimated to examine the
effect of land use regulations, benefit uncertainty, and other socioeconomic and spatial
variables on urbanization and farmland development for counties in five western states
(California, Idaho, Nevada, Oregon, and Washington). The empirical results confirm
that risks associated with alternative land uses are important variables affecting land
allocation. Agricultural zoning, state land use planning, and mandatory review of
projects involving farmland conversion are most effective in controlling farmland
development among all policies examined in this study.
In the second paper, a theoretical model is developed to analyze the
interactions among residential development, land use regulations, and public financial
impacts (public expenditure and property tax). A simultaneous equations system with
self-selection and discrete dependent variables is estimated to determine the
interactions for counties in the five western states. The results show that county
governments are more likely to impose land use regulations when facing rapid land
development, high public expenditure and property tax. The land use regulations, in
turn, decrease land development, long-run public expenditure, and property tax at the
cost of higher housing prices and short-run property tax.
The third paper examines equilibrium properties of local jurisdictions implied
by the Tiebout-style model. A set of equilibrium conditions are derived from a
general equilibrium model of local jurisdictions. The conditions are parameterized
and empirically estimated in a two-stage procedure. The method is applied to
communities in a Portland metropolitan area with an extension of public-good
provision to include environmental amenities. The results suggest that the model can
replicate many of the empirical regularities observed in the data. For example, the
predicted income distributions across communities closely matched the observed
distribution. The estimated income elasticity of housing demand is consistent with
previous findings. One important finding of this paper is that the parameter estimates
would be biased if environmental amenities are not considered.
