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Communities, Competition, Spillovers, and Open Space

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  • Aaron Strong
  • Randall P. Walsh

Abstract

We explore the impact of the spatial distribution of developers on the private provision of open space. Our analysis yields three main findings. First, we demonstrate that the mixed public good nature of open space (relative to private lot consumption) can lead a single land rent-maximizing developer to over-supply open space relative to the utility-maximizing level. Second, by explicitly incorporating the spatial distribution of open-space spillovers, we show how competition can lead not only to inefficient levels of open space, but also to inefficiencies in its spatial distribution. Finally, we evaluate the impact of market-based open-space instruments.

Suggested Citation

  • Aaron Strong & Randall P. Walsh, 2008. "Communities, Competition, Spillovers, and Open Space," Land Economics, University of Wisconsin Press, vol. 84(2), pages 169-187.
    • Handle: RePEc:uwp:landec:v:84:y:2008:i:2:p:169-187
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    References listed on IDEAS

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    1. Mary Riddel, 2001. "A Dynamic Approach to Estimating Hedonic Prices for Environmental Goods: An Application to Open Space Purchase," Land Economics, University of Wisconsin Press, vol. 77(4), pages 494-512.
    2. Cremer, Helmuth & Marchand, Maurice & Pestieau, Pierre, 1997. "Investment in local public services: Nash equilibrium and social optimum," Journal of Public Economics, Elsevier, vol. 65(1), pages 23-35, July.
    3. Elizabeth Marshall, 2004. "Open-Space Amenities, Interacting Agents, and Equilibrium Landscape Structure," Land Economics, University of Wisconsin Press, vol. 80(2), pages 272-293.
    4. Sonstelie, Jon C. & Portney, Paul R., 1978. "Profit maximizing communities and the theory of local public expenditure," Journal of Urban Economics, Elsevier, vol. 5(2), pages 263-277, April.
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    Cited by:

    1. Krekel, Christian & Kolbe, Jens & Wüstemann, Henry, 2016. "The greener, the happier? The effect of urban land use on residential well-being," Ecological Economics, Elsevier, vol. 121(C), pages 117-127.

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    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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