Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/123800 
Year of Publication: 
2015
Series/Report no.: 
cege Discussion Papers No. 270
Publisher: 
University of Göttingen, Center for European, Governance and Economic Development Research (cege), Göttingen
Abstract: 
Tradable development rights (TDR) are discussed as a mechanism to reduce land consumption while ensuring an efficient implementation of profitable building projects. We present a novel laboratory experiment on the feasibility of TDR and simulate the acquisition and trading of development rights. In particular, we investigate the effects of uncertainty in the revenues of land consumption projects. Overall, we find that TDR are reallocated as suggested by theory, although higher uncertainty has substantial detrimental effects on the distribution of land consumption projects and thus aggregate welfare. This enables us to formulate distinct policy implications for the design of TDR systems.
Subjects: 
auction
economic experiment
land consumption
tradable planning permits
urban sprawl
JEL: 
C91
C92
D8
Document Type: 
Working Paper

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