IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v57y2016i2d10.1007_s00168-015-0675-z.html
   My bibliography  Save this article

The problem of land value betterment: a simplified agent-based test

Author

Listed:
  • Yiming Wang

    (University College London
    Tongji University)

  • Michelle Baddeley

    (University College London)

Abstract

In this paper, we employ behaviour-driven cellular automata as a simplified agent-based modelling approach to test the seminal Coase theorem, with a policy focus on the land value betterment effect of urban infrastructure provision. Four prototypical development regimes are identified from international practice: (1) the private developer-oriented Metroland model dating back to the suburbanisation of London in the nineteenth century England; (2) the private household-led special district model, which can be observed in many contemporary US suburbs; (3) the public planning-regulated model, as featured in most post-war European welfare state countries, including the present-day UK; (4) the public state-as-developer model, which characterises what has been taking place in China. A repeated analysis of variance (ANOVA) based on the results of a large number of cellular automata simulations suggests no significant difference between models I and II in terms of their welfare outcomes measured by aggregate utility. However, models III and IV are both found to generate significantly less welfare than models I and II, under strict assumptions of zero transaction costs, perfect information, perfect capital markets and perfect competition.

Suggested Citation

  • Yiming Wang & Michelle Baddeley, 2016. "The problem of land value betterment: a simplified agent-based test," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(2), pages 413-436, November.
    • Handle: RePEc:spr:anresc:v:57:y:2016:i:2:d:10.1007_s00168-015-0675-z
    DOI: 10.1007/s00168-015-0675-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00168-015-0675-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00168-015-0675-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephen B. Billings & Thomas G. Thibodeau, 2013. "Financing Residential Development with Special Districts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 41(1), pages 131-163, March.
    2. Eric J Heikkila & Yiming Wang, 2009. "Fujita and Ogawa Revisited: An Agent-Based Modeling Approach," Environment and Planning B, , vol. 36(4), pages 741-756, August.
    3. Itzhak Benenson & Erez Hatna & Ehud Or, 2009. "From Schelling to Spatially Explicit Modeling of Urban Ethnic and Economic Residential Dynamics," Sociological Methods & Research, , vol. 37(4), pages 463-497, May.
    4. Ronald H. Coase, 2008. "The Institutional Structure of Production," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 2, pages 31-39, Springer.
    5. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 2008. "Why Is Rent-Seeking So Costly to Growth?," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 213-218, Springer.
    6. Chris Webster & Fulong Wu, 2001. "Coase, Spatial Pricing and Self -organising Cities," Urban Studies, Urban Studies Journal Limited, vol. 38(11), pages 2037-2054, October.
    7. Pancs, Romans & Vriend, Nicolaas J., 2007. "Schelling's spatial proximity model of segregation revisited," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 1-24, February.
    8. Lichtenberg, Erik & Ding, Chengri, 2009. "Local officials as land developers: Urban spatial expansion in China," Journal of Urban Economics, Elsevier, vol. 66(1), pages 57-64, July.
    9. Shin S. Lee & Christopher J. Webster & Gonzalo Melián & Gabriel Calzada & Richard Carr, 2013. "A Property Rights Analysis of Urban Planning in Spain and UK," European Planning Studies, Taylor & Francis Journals, vol. 21(10), pages 1475-1490, October.
    10. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    11. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2012. "Evaluating conditions in major Chinese housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 531-543.
    12. Brueckner, Jan K., 1997. "Infrastructure financing and urban development:: The economics of impact fees," Journal of Public Economics, Elsevier, vol. 66(3), pages 383-407, December.
    13. Jieming Zhu, 2004. "Local developmental state and order in China's urban development during transition," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 28(2), pages 424-447, June.
    14. John Tomaney & Pedro Marques, 2013. "Evidence, Policy, and the Politics of Regional Development: The Case of High-Speed Rail in the United Kingdom," Environment and Planning C, , vol. 31(3), pages 414-427, June.
    15. J Barlow & A King, 1992. "The State, the Market, and Competitive Strategy: The Housebuilding Industry in the United Kingdom, France, and Sweden," Environment and Planning A, , vol. 24(3), pages 381-400, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. Peter Clinch & Eoin O'Neill, 2010. "Assessing the Relative Merits of Development Charges and Transferable Development Rights in an Uncertain World," Urban Studies, Urban Studies Journal Limited, vol. 47(4), pages 891-911, April.
    2. Glenn Furton & Adam Martin, 2019. "Beyond market failure and government failure," Public Choice, Springer, vol. 178(1), pages 197-216, January.
    3. Wiser, R. H., 2000. "The role of public policy in emerging green power markets: an analysis of marketer preferences," Renewable and Sustainable Energy Reviews, Elsevier, vol. 4(2), pages 177-212, June.
    4. repec:ebl:ecbull:v:3:y:2007:i:68:p:1-7 is not listed on IDEAS
    5. Amar Gande & Kose John & Vinay B. Nair & Lemma W. Senbet, 2020. "Taxes, institutions, and innovation: Theory and international evidence," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1413-1442, December.
    6. Alex Robson & Stergios Skaperdas, 2008. "Costly enforcement of property rights and the Coase theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(1), pages 109-128, July.
    7. Yochanan Shachmurove, 2012. "Failing Institutions Are at the Core of the U.S. Financial Crisis," PIER Working Paper Archive 12-040, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    8. Buchen, Clemens, 2010. "Emerging economic systems in Central and Eastern Europe – a qualitative and quantitative assessment," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 37141.
    9. Marcus Dejardin & Hélène Laurent, 2024. "Entry-regulation and corruption: grease or sand in the wheels of entrepreneurship? Fresh evidence according to entrepreneurial motives," Small Business Economics, Springer, vol. 62(3), pages 1223-1272, March.
    10. Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2001. "The Effect of Allowance Allocation on the Cost of Carbon Emission Trading," RFF Working Paper Series dp-01-30-, Resources for the Future.
    11. Williamson, Oliver E., 2010. "Transaction Cost Economics: The Natural Progression," Journal of Retailing, Elsevier, vol. 86(3), pages 215-226.
    12. Baudry, Marc & Faure, Anouk & Quemin, Simon, 2021. "Emissions trading with transaction costs," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    13. Barbara Praetorius, 1996. "Nachfrageseitiges Marktversagen auf dem Energiemarkt: Empirische Evidenz, theoretische Aspekte, politische Folgerungen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 65(2), pages 143-155.
    14. Xiaolun Yu, 2024. "Low‐rise buildings in big cities: Theory and evidence from China," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(2), pages 366-400, March.
    15. Wang, Sen & Bogle, Tim & van Kooten, G. Cornelis, 2012. "Forestry and the New Institutional Economics," Working Papers 130818, University of Victoria, Resource Economics and Policy.
    16. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.
    17. Akee, Randall K. Q., 2006. "Checkerboards and Coase: Transactions Costs and Efficiency in Land Markets," IZA Discussion Papers 2438, Institute of Labor Economics (IZA).
    18. Ervin, David E. & Fox, Glenn, 1998. "Environmental Policy Considerations In The Grain-Livestock Subsectors In Canada, Mexico And The United States," Proceedings of the 4th Agricultural and Food Policy Systems Information Workshop 1998: Economic Harmonization in the Canadian\U.S.\Mexican Grain-Livestock Subsector; 16754, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    19. Christophe Depres & Gilles Grolleau & Naoufel Mzoughi, 2008. "Contracting for Environmental Property Rights: The Case of Vittel," Economica, London School of Economics and Political Science, vol. 75(299), pages 412-434, August.
    20. Vítor Gaspar, 2010. "Financial Stability and Policy Cooperation," Working Papers o201001, Banco de Portugal, Economics and Research Department.
    21. Søren Djørup, 2021. "The institutionalisation of zero transaction cost theory: a case study in Danish district heating regulation," Evolutionary and Institutional Economics Review, Springer, vol. 18(1), pages 159-174, April.

    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:57:y:2016:i:2:d:10.1007_s00168-015-0675-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.