A simultaneous equations model of zoning and land values

Daniel P. McMillen, John F. McDonald

Research output: Contribution to journalArticle


Simultaneous equations models with selectivity are estimated by maximum likehood procedures for four land uses. Zoning is a function of lagged land use and relative land values, and values are a function of land tract characteristics. Land value estimates are constructed for all tracts and uses, and are used as explanatory variables in two-limit Tobit models of zoning. Only for single-family residential land does zoning respond to incremental changes in relative land values. The study provides new evidence that zoning matters, and that single-family homes are a preferred land use.

Original languageEnglish (US)
Pages (from-to)55-72
Number of pages18
JournalRegional Science and Urban Economics
Issue number1
StatePublished - May 1991

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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