Analyzing Open Space Policies in a Locational Equilibrium Model with Endogenous Landscape Amenities

Open space protection and the new ‘Smart Growth’ movement have to date been policy slogans lacking any formal analysis and evaluation. Evaluation of land protection policies requires a structural model for land markets with spatial delineation so that the impacts of policy on locational attributes can be described. This paper uses estimates for household preferences derived from a locational equilibrium model to compute general equilibrium responses and associated welfare changes in response to spatially delineated open space protection policies and development restrictions. Moreover, the framework accounts for the endogeneity of open space amenities. Results from general equilibrium policy experiments highlight the importance of accounting for general equilibrium effects in analyzing the impacts of open space policies. When the endogeneity of open space amenities is accounted for, the welfare impacts of land protection policies are reduced as households adjust in equilibrium in a way that offsets the impacts of the exogenous change. The impacts of development restrictions are shown to depend on the characteristics of the sub-regions where the restrictions are imposed.