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Measuring welfare gains from relaxation of land-use restrictions: The case of India's building-height limits

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  • Brueckner, Jan K.
  • Sridhar, Kala Seetharam

Abstract

This paper estimates the effect of building-height limits on the spatial sizes of Indian cities. Regression results show that height limits, which are imposed in draconian fashion in India, cause spatial expansion of its cities, as predicted by the theoretical model of Bertaud and Brueckner (2005). The regression coefficients, by yielding the implied reduction in the area of an average city from a marginal increase in its height limit, allow computation of the annual saving in commuting cost for the city's edge household when the limit is relaxed. This cost saving, which is an exact measure of the common welfare gain for each urban household, can be scaled up to yield the aggregate consumer gain in a typical city from relaxation of India's restrictive height limits. For a moderate height-limit increase, this gain equals 106million rupees.

Suggested Citation

  • Brueckner, Jan K. & Sridhar, Kala Seetharam, 2012. "Measuring welfare gains from relaxation of land-use restrictions: The case of India's building-height limits," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1061-1067.
    • Handle: RePEc:eee:regeco:v:42:y:2012:i:6:p:1061-1067
    DOI: 10.1016/j.regsciurbeco.2012.08.003
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    References listed on IDEAS

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    More about this item

    Keywords

    FAR limits; Building heights; Urban sprawl; India;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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