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Land use, worker heterogeneity and welfare benefits of public goods

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  • Teulings, Coen
  • De Groot, Henri L.F.
  • Ossokina, Ioulia V.

Abstract

We show that investments in public goods change the optimal land use in their vicinity, leading to additional welfare benefits. This occurs through two sorting mechanisms. First, availability of public goods leads to higher population densities. Second, population groups sort according to their preferences for public goods. We develop a structural spatial general equilibrium model that accounts for these effects. The model is estimated using data on transport infrastructure, commuting behavior, land use and land rents for some 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits of investments in public transport infrastructure are shown to differ sharply by workers? educational attainment. Welfare gains from changes in land use account for up to 30% of the total benefits of a transport investment.

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  • Teulings, Coen & De Groot, Henri L.F. & Ossokina, Ioulia V., 2014. "Land use, worker heterogeneity and welfare benefits of public goods," CEPR Discussion Papers 10216, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10216
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    3. Sander Hoogendoorn & Joost van Gemeren & Paul Verstraten & Kees Folmer, 2016. "House prices and accessibility: Evidence from a natural experiment in transport infrastructure," CPB Discussion Paper 322.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Sander Hoogendoorn & Joost van Gemeren & Paul Verstraten & Kees Folmer, 2016. "House prices and accessibility: Evidence from a natural experiment in transport infrastructure," CPB Discussion Paper 322, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Rutger-Jan Lange & Coen N. Teulings, 2021. "The option value of vacant land: Don't build when demand for housing is booming," Tinbergen Institute Discussion Papers 21-022/IV, Tinbergen Institute.
    6. Coen N. Teulings, 2016. "Secular Stagnation, Rational Bubbles, and Fiscal Policy," Cambridge Working Papers in Economics 1642, Faculty of Economics, University of Cambridge.
    7. Bruno De Borger & Stef Proost, 2015. "Tax and regulatory policies for European Transport – getting there, but in the slow lane," Working Papers of Department of Economics, Leuven 497597, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
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    9. Peng Zhou & Fengwen Chen & Wei Wang & Peixin Song & Chenliang Zhu, 2019. "Does the Development of Information and Communication Technology and Transportation Infrastructure Affect China’s Educational Inequality?," Sustainability, MDPI, vol. 11(9), pages 1-19, May.
    10. Ioulia V Ossokina & Jos van Ommeren & Henk van Mourik, 2023. "Do highway widenings reduce congestion?," Review of Finance, European Finance Association, vol. 23(4), pages 871-900.
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    More about this item

    Keywords

    Local public goods; Agglomeration; Spatial equilibrium; Residential sorting; Land rates;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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