Economics

JUE Insight: Measuring the Stringency of Land Use Regulation Using a Shadow Price Approach

Document Type

Article

Abstract

I propose a shadow price approach to measuring the stringency of land use regulation. A regulation is considered more restrictive if the land developer is willing to pay a larger amount for a marginal relaxation of the regulation. I show that existing theory-based measures of land use stringency are either equivalents or variations of this shadow price measure. Using data from China, I demonstrate that it is possible to compare the stringency of two kinds of land use regulation, a key advantage of this shadow price approach.

Publication Title

Journal of Urban Economics

Publication Date

2023

Volume

133

ISSN

0094-1190

DOI

10.1016/j.jue.2022.103461

Keywords

land use, regulation, shadow price, stringency

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