Estimating spatially varying effects of urban growth boundaries on land development and land value

The empirical evidence is mixed on whether urban growth boundaries (UGB) effectively moderate urbanization. The spatially varying effects of a UGB on land development patterns and land value in Eastern Tennessee, USA, were estimated to examine the impacts of the UGB in different submarkets. A simultaneous-equation model was used with an endogenous binary variable to reflect the parcel's state of development and an endogenous continuous variable measuring parcel land value. Submarkets were identified using cluster analysis. The results suggest that the UGB slowed down development in urban submarkets but development accelerated in rural–urban submarket interfaces where the UGB did not play a role in land values.