Essays in the economics of land, housing, and urban policy

Yu, Xiaolun (2021) Essays in the economics of land, housing, and urban policy. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis combines econometric methods with spatial techniques to study the economics of land, housing, and urban policy in the context of both developed and developing countries. It is organized into four independent chapters. The first chapter (co-authored) takes advantage of two spatial discontinuities in Britain’s Help to Buy (HtB) scheme to explore the effectiveness and distributional effects of mortgage credit expansion policies. We find that HtB significantly increased house prices and had no discernible effect on construction volumes in Greater London. We conclude that HtB may be ineffective in already unaffordable and supply constrained areas. The second chapter studies the determinants of floor area ratio (FAR) limit, a major form of land use regulation that specifies construction density, in China. I develop a spatial equilibrium framework to explore the designation process of FAR limit and the trade-off faced by local governments. Exploiting a rich dataset of land transactions and the exogenous variation generated by a central government policy, I find that local budgetary revenue has a negative impact on FAR design. The third chapter (co-authored) explores the determinants of the speed of residential development after the onset of construction. Using a sample of over 110,000 residential developments in England from 1996 - 2015 and employing an instrumental variable- and fixed effects-strategy, we find that strong local demand increases the rate of site build out, but less so for projects located in areas with more restrictive supply constraints and less competition among developers. The last chapter measures ‘regulatory tax’ in 117 major Chinese cities by using a spatially matched dataset of land plots and residential projects. The measure shows substantial variations in regulatory restrictiveness across Chinese cities. I also find that housing prices respond more strongly to local demand shocks in cities with more severe regulatory and geographical constraints.

Item Type:	Thesis (PhD)
Additional Information:	© 2021 Xiaolun Yu
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
Sets:	Departments > Geography and Environment
Supervisor:	Hilber, Christian and Carozzi, Felipe
URI:	http://etheses.lse.ac.uk/id/eprint/4374

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