Tests of the Urban Economic Model Using a New Measure of Leapfrog Development

Abstract

The traditional urban economic model explains leapfrog development as the result of intertemporal optimization by landowners who maximize expected net returns by developing land that is farther from the city in earlier time periods and developing land that is closer to the city in a higher-valued use at a later time. Despite this longstanding theory, none have provided an accurate empirical test of whether urban development patterns conform to these predictions. Using a unique dataset on residential subdivision development of variable density and size from 1960 to 2005 in an urbanizing region of Maryland, we develop a new, subdivision-specific metric of leapfrog development based on accessibility via the road network. Leapfrog development is defined relative to each individual subdivision as the percentage of developable land that is more accessible, but still undeveloped at the time of the parcel's conversion to a residential subdivision. Our analysis reveals an evolution of leapfrog development that confirms some of the basic predictions of the urban economic model, including systematic reductions in leapfrog development over time, greater leapfrog development over distance to urban centers, and higher-density infill development in later time periods. However, we also find aspects of the pattern that are not well explained by the model. A first difference model reveals that variations in local zoning policies are significant in determining the location and rate of infill development. We conclude that, while the urban economic model is able to explain some of the observed features of leapfrog development, the role of local land use regulations may be equally important, if not more so, in explaining these patterns.