Examining lag effects between industrial land development and regional economic changes: The Netherlands experience

Eda Ustaoglu,Carlo Lavalle,Boris Podobnik

doi:10.1371/journal.pone.0183285

Abstract

In most empirical applications, forecasting models for the analysis of industrial land focus on the relationship between current values of economic parameters and industrial land use. This paper aims to test this assumption by focusing on the dynamic relationship between current and lagged values of the ‘economic fundamentals’ and industrial land development. Not much effort has yet been attributed to develop land forecasting models to predict the demand for industrial land except those applying static regressions or other statistical measures. In this research, we estimated a dynamic panel data model across 40 regions from 2000 to 2008 for the Netherlands to uncover the relationship between current and lagged values of economic parameters and industrial land development. Land-use regulations such as land zoning policies, and other land-use restrictions like natural protection areas, geographical limitations in the form of water bodies or sludge areas are expected to affect supply of land, which will in turn be reflected in industrial land market outcomes. Our results suggest that gross domestic product (GDP), industrial employment, gross value added (GVA), property price, and other parameters representing demand and supply conditions in the industrial market explain industrial land developments with high significance levels. It is also shown that contrary to the current values, lagged values of the economic parameters have more sound relationships with the industrial developments in the Netherlands. The findings suggest use of lags between selected economic parameters and industrial land use in land forecasting applications.

Highlights

Industrial land constitutes a significant part of the land value in urban areas and regions
Considering the importance of key economic parameters in forecasting industrial land in Netherlands and internationally, this study focuses on the relationship between industrial land development and these indicators to uncover the influence of lags of the subject indicators on the development of industrial land use
Regarding Models A1 and B1, the total absolute error (TAE) is within the limit of around 10%, which is generally considered as acceptable [65] and the average absolute error (AAE) is the smallest among all others

Summary

Introduction

Industrial land constitutes a significant part of the land value in urban areas and regions. Examining lag effects between industrial land development and regional economic changes constraints or setting new allowances on new land developments have caused significant impacts on the urban land, in particular industrial land developments [1,2,3,4]. Because of the impact of such policies on spatial configuration of land use, it is imperative to understand how industrial land might evolve in an urban environment. The dynamism of land-use change related to industrial and commercial activities is of significance to land-use models which simulate the competition between various land uses to assess possible future land developments [5,6]. Land-use modelling is central to the planning and policy making processes as it provides an understanding of how future land-use configurations might evolve under different socio-economic conditions and possible future policy alternatives [7]. Reviews of spatial land-use models can be found in Briassoulis [8] and Verburg et al [9]

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Conclusion