Webex-seminar: The Welfare Effects of Greenbelt Policy: Evidence from England

I measure the economic effects of greenbelts that prohibit new construction beyond a predefined urban fringe and therefore act as urban growth boundaries. I focus on England, where 13% of the land is designated as greenbelt land. I estimate a quantitative general equilibrium model that includes amenities, housing construction, a traffic congestion externality, agglomeration forces, productivity, and household location choices. To identify causal effects of greenbelt land, I use greenbelt land in 1973 or focus on areas within a km of greenbelt boundaries. Greenbelt policy appears to generate positive amenity effects, but also strongly reduces housing supply. I find that greenbelts seem to increase welfare, as the equivalent income increase of workers is 0.4% and land rents increase by about 4.5%. Whether greenbelts benefit workers critically depends on the presence of greenbelt amenities.