Primary Research Focuses: Spatial Economics, Urban Economics

Secondary Research Focus: International Trade

References: 

• Esteban Rossi-Hansberg (Committee Chair)
• Daniel McMillen
• Jonathan Dingel

Job Market Paper: "Optimal Land Use Regulations"

[Abstract] This paper measures land use regulations across neighborhoods in a city and solves for optimal land use regulations within a general equilibrium model of the city with urban externalities. Land use regulations are hard to quantify because they are bundles of statutory rules whose effects depend on local market conditions. To measure land use regulations, I construct a wedge-based measure of land use regulations that is recovered using data on construction costs and property values. I embed neighborhood-level regulations into a general-equilibrium model of a city with productivity and amenity externalities. I show that land use regulations cannot perfectly correct for urban externalities. Land use regulations are second-best policies as they do not directly target people, who are the source of urban externalities, but instead act on real estate. I solve numerically for optimal land use regulations across neighborhoods and use automatic differentiation methods to keep the high-dimensional optimal policy problem computationally tractable. Calibrating the model for the city of Chicago and Cook County, I find that the optimal policy delivers significant welfare gains relative to current land use regulations. Optimal regulations depend less on local amenities and productivity and more on spatial linkages between locations, in the form of residents'access to high-paying jobs and firms' access to workers.