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The Welfare Effects of Greenbelt Policy: Evidence from England

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  • Hans R A Koster

Abstract

I measure the economic effects of greenbelts that prohibit new construction beyond a predefined urban fringe and therefore act as urban growth boundaries. I focus on England, where 13% of the land is designated as greenbelt land. I provide reduced-form evidence and estimate a quantitative equilibrium model that includes amenities, housing supply, a traffic congestion externality, agglomeration forces, productivity and household location choices. Greenbelt policy generates positive amenity effects, but also strongly reduces housing supply. I find that greenbelts increase welfare because amenity effects are sufficiently strong. At the same time, however, greenbelts decrease housing affordability by limiting housing supply.

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  • Hans R A Koster, 2023. "The Welfare Effects of Greenbelt Policy: Evidence from England," The Economic Journal, Royal Economic Society, vol. 134(657), pages 363-401.
    • Handle: RePEc:oup:econjl:v:134:y:2023:i:657:p:363-401.
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    References listed on IDEAS

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