The distributional effects of privately provided open space

This dissertation examines the effect of conservation easements on housing markets, and the distributional consequences of their expansion. The topic is important because the use of conservation easements in the U.S. has expanded dramatically in the last decades, along with the financial incentives given to landowners for relinquishing the development rights on their land. Quantifying the effects of conservation easements on residential property prices and their distributional implications will help in improving the policies that support them.;In Chapter 2 conservation easements are added to a Muth-Mills urban economics model, yielding predictions about the change in land rents, housing prices and quantities: rents and prices rise in the proximity of the easements. These changes affect the utility of different income groups in the city in distinct ways, benefiting the rich and making the poor worse off. Similar results are predicted for the utility of homeowners and renters. The predictions of the model are then verified with a simulation.;Chapter 3 presents an empirical investigation of the theoretical predictions, using a rich dataset from the counties in the San Francisco Bay Area. Conservation easements are found to have a significant effect on housing prices, but the effect is different between areas with different housing tenure shares. An increase in the share of home renters in a neighborhood decreases the effect of conservation easements on housing prices. This confirms the prediction that the willingness to pay of renters for environmental amenities is lower. The effect on prices is also found to be distinct from that of other types of open space.;Chapter 4 explores the taxation of privately provided open space with an optimal taxation model. The model accounts for the positive externality provided by open space, and also for the effect of conservation easements on prices. The resulting subsidy will differ according to the income and housing tenure distribution in the region were the easement is located, as well as by population density.