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Institutional settings and urban sprawl: evidence from Europe

Ehrlich, Maximilian V., Hilber, Christian A. L. and Schöni, Olivier (2018) Institutional settings and urban sprawl: evidence from Europe. Journal of Housing Economics, 42. pp. 4-18. ISSN 1051-1377

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Identification Number: 10.1016/j.jhe.2017.12.002


This article explores the role of institutional settings in determining spatial variation in urban sprawl across Europe. We first synthesize the emerging literature that links land use policies and local fiscal incentives to urban sprawl. Next, we compile a panel dataset on various measures of urban sprawl for European countries using high-resolution satellite images. We document substantial variation in urban sprawl across countries. This variation remains roughly stable over the period of our analysis (1990-2012). Urban sprawl is particularly pronounced in emerging Central and Eastern Europe but is comparatively low in Northern European countries. Urban sprawl – especially outside functional urban areas – is strongly negatively associated with real house price growth, suggesting a trade-off between urban containment and housing affordability. Our main novel empirical findings are that decentralization and local political fragmentation are significantly positively associated with urban sprawl. Decentralized countries have a 25 to 30 percent higher sprawl index than centralized ones. This finding is consistent with the proposition that in decentralized countries fiscal incentives at local level may provide strong incentives to permit residential development at the outskirts of existing developments

Item Type: Article
Official URL:
Additional Information: © 2017 Elsevier
Divisions: Economics
Geography & Environment
Subjects: G Geography. Anthropology. Recreation > GF Human ecology. Anthropogeography
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: H - Public Economics > H2 - Taxation, Subsidies, and Revenue
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents
H - Public Economics > H4 - Publicly Provided Goods
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis
Date Deposited: 19 Dec 2017 15:52
Last Modified: 20 Oct 2021 01:23
Projects: 162589
Funders: Swiss National Science Foundation

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