Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits

Jan K. Brueckner; Shihe Fu; Yizhen Gu; Junfu Zhang

doi:10.1162/rest_a_00650

Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits

Jan K. Brueckner¹; Shihe Fu²; Yizhen Gu³; Junfu Zhang⁴

¹ UC Irvine · ² WangYanan Institute for Studies in Economics, Xiamen University · ³ Institute for Economic and Social Research, Jinan University · ⁴ Clark University

The Review of Economics and Statistics 2017 open access

This paper develops a new approach for measuring the stringency of a major form of land use regulation, building height restrictions, and applies it to an extraordinary data set of land-lease transactions from China. Our theory shows that the elasticity of land price with respect to the floor area ratio (FAR), a building height indicator, is a measure of the regulation's stringency (the extent to which FAR is kept below the free-market level). Using a national sample, estimation allowing this elasticity to be city-specific shows variation in the stringency of FAR regulation across Chinese cities. Single-city estimation for Beijing shows that stringency varies with site characteristics.

DOI: 10.1162/rest_a_00650
Volume: 99 (4)
Pages: 663-677
Language: en
Export: BibTeX
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