The Welfare Economics of Land Use Planning¤
Paul Cheshirey
and Stephen Sheppardz
January 2000
Abstract
Despite the pervasive nature of land use planning and land use regulation, evaluation of the costs
and bene…ts of these policies has received only limited attention. This paper presents an empirical
methodology, based on clear microeconomic foundations, for the evaluation of bene…ts and costs of
land use planning. The technique is applied to the Town and Country Planning System of the UK.
Evaluation is presented of gross bene…ts from several land use planning activities, the net costs of land
use planning, and the distributional consequences of these policies. The results show that these welfare
and distributional impacts can be very considerable.