Outside the built up area land is less scarce. Therefore, it is not reasonable to expect that a
high percentage of the land would be built on in case the spatial planning restrictions are
removed. We assume that only 20% of the land outside the built-up area (opposed to the
assumed 50% inside the built-up area) would actually be built on should the restrictions be
removed. The remaining 80% of the land is assumed to retain its original function. Following
this reasoning one might come to the conclusion that the surplus value is the price of
agricultural land receiving an urban function (23 Euro) minus the value of agricultural land
(2.2 Euro). However, in our opinion this is not a correct measure. The main argument is that
because of the restrictions at the preferred location, houses and/or industrial sites will be built
at other locations. In this case the value of land will rise by somewhat less than 23-2.2 Euro,
because this is not the most preferred location and hence the pertaining bid price must be
lower. In our computation of the social costs we use, quite arbitrarily, a difference in value
between the most preferred and the second best location of approximately 4.5 Euro per m2
.