- This dissertation consists of three papers on land use economics and regulation. The
first paper reviews numerous past literatures on how land-use regulation, agricultural
subsidies, and use-value assessment method affect land values. The second paper uses a
theoretical model to analyze how imposing minimum-lot-size zoning and different
designs of minimum-lot-size zoning policies affects land value. The third papers use
land data from Oregon to investigate the price effect of minimum-lot-size zoning and
potential impact of Measure 37 and 49. The first essay reviews an extensive collection of literature from most major applied
economics journals in recent years. These past studies attempted to investigate the
impacts of various land use policies, including minimum-lot-size zoning, open space
protection, wetland conservation, etc. These studies demonstrate how land use policies
might affect residents' land consumption, social welfare, land markets, local
government finance, and urban development patterns. Various econometric and
mathematical models have been used to overcome problems related to modeling and
data, such as spatial correlation.
The objective of the second essay is to investigate the effect of the minimum-lot-size
zoning on land values versus the value of individual exemptions from the regulations.
The study first assumes all residents live in a monocentric city and have the same
income constraints, and then assumes that there are two income groups living in the
monocentric city. Minimum-lot-size zoning is applied to the periphery of the city. As
stated in the study by Jaeger and Plantinga (special report, June 2007), distinguishing
between two concepts - the change in property value due to regulation and the value to a
landowner of an individual exemption to a regulation – is important to estimate the
potential impact of Measure 37 and 49. Therefore, this study will explore both cases: 1)
the removal of minimum-lot-size zoning from all parcels, and 2) having a single parcel
exempted from zoning. Both open-city and closed-city scenarios will be considered.
The comparative statics will show how the zoning policy influences urban land values.
In addition, a simulation will help to demonstrate the impact of policy changes.
The third essay uses the two-stage hedonic model to estimate the demand for lot size.
The first stage estimation allows us to estimate the marginal impact of zoning policies,
while the second stage estimation is used to investigate how land values are affected by
the non-marginal change in zoning policies, such as the elimination of zoning or
changes related to Measure 37. In the first stage estimation, the zoning policy is
assumed to have two conflicting impacts on the land value; the regulation reduces
development opportunities while it also may provide more environmental benefits. In
the empirical model, four Oregon counties are considered as separate land markets, and
the distribution of consumers' tastes are assumed to be the same across the counties.
This provides a tool for solving the identification problem in the second stage