Price Based Policies for Managing Residential Land Development: Impacts on Water Quality

45 Pages Posted: 9 Jun 2017 Last revised: 23 Jun 2018

See all articles by Douglas H. Wrenn

Douglas H. Wrenn

Pennsylvania State University, Agricultural Economics, Sociology, and Education

H. Allen Klaiber

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

David A. Newburn

University of Maryland - Department of Agricultural & Resource Economics

Date Written: May 10, 2018

Abstract

Land plays a critical part in determining the health of an urban ecosystem. One of its key roles is regulation of nutrient delivery. In this paper, we combine results from an IV duration model with a water quality model in a series of land use simulations to examine the impact that different land use policies have in limiting or enhancing nutrient pollution in an urban setting. Our results reveal significant trade-offs between objectives for managing urban growth and those for managing water quality. A uniform tax on development significantly reduces acreage developed, but increases nitrogen and phosphorus loads. A green tax for development on forested parcels is the most effective at mitigating water quality impacts, albeit with the lowest reduction of acreage developed. Our results suggest that policymakers and planners should use a multi-objective approach in designing land use policies.

Keywords: Land Use, Water Quality, Duration Models, Price Endogeneity

JEL Classification: Q24, Q25, Q53, Q58

Suggested Citation

Wrenn, Douglas H. and Klaiber, H. Allen and Newburn, David Allen, Price Based Policies for Managing Residential Land Development: Impacts on Water Quality (May 10, 2018). Available at SSRN: https://ssrn.com/abstract=2983993 or http://dx.doi.org/10.2139/ssrn.2983993

Douglas H. Wrenn (Contact Author)

Pennsylvania State University, Agricultural Economics, Sociology, and Education ( email )

University Park, PA 16802-3306
United States

H. Allen Klaiber

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States

David Allen Newburn

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States

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