Could zoning have increased land values in chicago?

Daniel P. McMillen, John F. McDonald

Research output: Contribution to journalArticlepeer-review


The paper presents a model in which land values are influenced by the mix of land use on the block. Conditions for land-value maximization are derived, and the circumstances under which land-use zoning can increase land values are discussed. A necessary condition for the assignment of a block exclusively to residential use to increase land values is that residential land values rise as the proportion of the block that is in residential use increases. Empirical land-value functions are estimated for Chicago in 1921, two years before the first zoning ordinance was adopted. The empirical results imply that the land-use zoning system adopted in 1923 could not have brought about a general increase in land values. A model of the zoning decision for land use at the block level is also estimated.

Original languageEnglish (US)
Pages (from-to)167-188
Number of pages22
JournalJournal of Urban Economics
Issue number2
StatePublished - Mar 1993
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


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