|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CVER | CEP | SERC | STICERD||Cookies?|
Paper No' CEPDP1549: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: re-development, supply elasticity, brownfields
JEL Classification: R14; R31
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:Several governments throughout the world apply policies aimed to re-mediate and recover vacant or idle land for other uses. This paper provides estimates of the price sensitivity of redevelopment, a crucial parameter for the success of these policies. My cross-sectional estimates measure how prices affect long-run conversion of unused or underused previously developed land in England. In order to solve the classical problem in the estimation of supply elasticities from market outcomes, I exploit school quality information and school admission boundaries to obtain a demand-shifter that is orthogonal to re-development costs. Estimation is conducted using a boundary discontinuity design based on this instrument. Results show that the probability of re-development is effectively sensitive to housing prices. Estimates indicate that a 1% increase in housing prices leads to a 0.07 percentage point reduction in the fraction of hectares containing brownfield land. Back-of-the envelope calculations using these estimates suggest that a large increase of 21% in prices across locations, or an equivalent subsidy, would be required to eliminate most of these vacant or underused land plots.
Copyright © RLAB & LSE 2003 - 2018 | LSE, Houghton Street, London WC2A 2AE | Contact: RLAB | Site updated 22 June 2018