Externalities in land use : with consideration of the effect of mobile home parks

Abstract

In this study of externalities in urban land use, a theory of externalities and property rights is outlined and related to urban land use problems. This theory is developed into a basic strategy for land use planning. In the empirical section, the hypothesized negative external effect of mobile home parks was analyzed using multiple regression. The analysis is based upon the hypothesis that the real estate market will reflect external costs and benefits as variations in property values. Estimated regression parameters showed a positive relationship between property values and distance from a mobile home park. Property values decreased by $3,100 over a range of 4,000 feet as one moved toward a mobile home park, ceteris paribus. Other land quality characteristics shown as significant determinants of property value were mountain view, lot size, and distance from the university, central business district, commercial establishment, industrial zone, and grade school.