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Welfare Effects of Anti-Sprawl Policies in the Presence of Urban Decline

Published online by Cambridge University Press:  15 September 2016

Antonio M. Bento ,
Sofia F. Franco  and
Daniel Kaffine
Antonio M. Bento
Affiliation:
Dyson School of Applied Economics and Management at Cornell University in Ithaca, New York
Sofia F. Franco
Affiliation:
Department of Economics and Management at the Universidade Lusófona de Humanidades e Tecnologias, Lisbon, Portugal, and Complexity and Economics, ISEG-UTL, Lisbon
Daniel Kaffine
Affiliation:
Division of Economics and Business at the Colorado School of Mines, in Golden, Colorado
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Abstract

This paper extends first-best analysis of anti-sprawl policies, such as development taxes, and examines the welfare effects of development taxes in the presence of urban decline at the city core. We find that anti-sprawl policies generate several important feedbacks within the urban system, generating additional welfare gains and affecting the level of urban decline and suburban sprawl. Further, the optimal development tax exceeds the (first-best) Pigouvian level, irrespective of whether or not revenues are returned lump-sum to all landowners or earmarked for urban decline mitigation.

Keywords

urban sprawldevelopment taxessecond-best policiesspatial modeling
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 40 , Issue 3 , December 2011 , pp. 439 - 450
Copyright
Copyright © 2011 Northeastern Agricultural and Resource Economics Association 

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