Land Regulations and the Optimal Distribution of Cities

47 Pages Posted: 30 Jan 2015 Last revised: 28 Aug 2015

See all articles by Nathan Seegert

Nathan Seegert

University of Utah - Department of Finance

Date Written: December 10, 2011

Abstract

Despite the large impact institutions have on the allocation of population, it remains an open question which institutions produce an efficient allocation of people across cities. Due to agglomeration, differences in amenities, and congestion, cities experience decreasing returns to population within cities (intensive margin) and across cities (extensive margin). This paper considers three institutional designs with different abilities or incentives to set land regulations. The main results imply that land regulations can be a part of an efficient institutional design and inefficient land regulations distort the types of cities, in terms of production and quality of life amenities, that are created. These insights are used to structurally estimate amenities across cities. The estimates, consistent with the model, find that cities with more production amenities have fewer land regulations (e.g., Houston, TX) and cities with more quality of life amenities have more land regulations (e.g., Portland, OR).

Keywords: Land use, urban economics, mobility, city growth

JEL Classification: R52, H73, R12, J61

Suggested Citation

Seegert, Nathan, Land Regulations and the Optimal Distribution of Cities (December 10, 2011). Available at SSRN: https://ssrn.com/abstract=2557399 or http://dx.doi.org/10.2139/ssrn.2557399

Nathan Seegert (Contact Author)

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

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