Abstract
This study extends a test for the presence of binding zoning, originally developed to be applied across many adjacent jurisdictions, so that it can be applied within a single jurisdiction. This study also demonstrates how to carry out this test in the presence of spatially correlated OLS residuals by using a mixed effects model whose coefficients are estimated using the maximum likelihood technique. The study examines twenty years of land sales data from a Midwestern county containing two adjacent cities surrounded by rural areas. A thirty-five-acre acre, minimum lot size in the rural area is found to be binding; while a 9,000 square foot minimum lot size in the cities is found to be not binding.This article is the winner of the Real Estate Market Analysis Manuscript Prize (sponsored by Torto Wheaton Research) present at the 2003 American Real Estate Society Annual Meeting.
Published Version
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