2002 World Congress of Environmental and Resource Economists

An overlooked aspect of urban sprawl is the fundamental connection between spatial economic decisions regarding land use and location at an individual level and the evolution of sprawl land use patterns at a regional level. These linkages arise in part from spatial externalities that generate interdependencies in the land use conversion decisions of neighboring landowners. We use an optimal timing of development model to investigate how neighborhood interaction effects, in the form of land use externalities, influence the land development decision and how the presence of such interaction effects complicate the effects of exogenous policies designed to deter development and promote smart growth. Detailed parcel-level data on land use change from a central Maryland region are used to estimate a hazard model of land use conversion that captures the cumulative influence of time-varying variables, including changes in neighboring land uses, on the rate of land conversion. The results of this model are used to test hypotheses regarding the direction and relative magnitudes of the interaction effects and to investigate the effect of a variety of policies that are designed to promote smart growth by clustering development and preserving open space. The model is also used to investigate how interaction effects modify the outcome of a particular policy variable aimed at creating open space by clustering development. The conclusions discuss the implications of interaction effects as unintended consequences that can exacerbate, rather than contain, sprawl.



	Paper Title:	Urban Sprawl As A Spatial Economic Process
	Presenting Author:	Nancy Bockstael (University of Maryland)
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	Abstract:	An overlooked aspect of urban sprawl is the fundamental connection between spatial economic decisions regarding land use and location at an individual level and the evolution of sprawl land use patterns at a regional level. These linkages arise in part from spatial externalities that generate interdependencies in the land use conversion decisions of neighboring landowners. We use an optimal timing of development model to investigate how neighborhood interaction effects, in the form of land use externalities, influence the land development decision and how the presence of such interaction effects complicate the effects of exogenous policies designed to deter development and promote smart growth. Detailed parcel-level data on land use change from a central Maryland region are used to estimate a hazard model of land use conversion that captures the cumulative influence of time-varying variables, including changes in neighboring land uses, on the rate of land conversion. The results of this model are used to test hypotheses regarding the direction and relative magnitudes of the interaction effects and to investigate the effect of a variety of policies that are designed to promote smart growth by clustering development and preserving open space. The model is also used to investigate how interaction effects modify the outcome of a particular policy variable aimed at creating open space by clustering development. The conclusions discuss the implications of interaction effects as unintended consequences that can exacerbate, rather than contain, sprawl.
	Link to paper:	Not available

	Session / Day / Time	14A / Thursday / 8:00 - 10:00 am

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