Working Paper: CEPR ID: DP11146
Authors: Gabriel Ahlfeldt; Kristoffer Møller; Sevrin Waights; Nicolai Wendland
Abstract: We develop and test a simple theory of the conservation area designation process in which we postulate that the level of designation is chosen to comply with interests of local homeowners. Conservation areas provide benefits to local homeowners by reducing uncertainty regarding the future of their area. At the same time, the restrictions impose a cost by limiting the degree to which properties can be altered. In line with our model predictions we find that an increase in preferences for historic character by the local pop-ulation increases the likelihood of a designation, and that new designations at the margin are not associat-ed with significant house price capitalisation effects.
Keywords: designation; difference-in-differences; england; gentrification; heritage; property value
JEL Codes: H23; H31; R40; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Homeowner preferences (R21) | Conservation area designation outcomes (Q26) |
| An increase in local preferences for heritage (Z10) | An increase in the likelihood of conservation area designation (Q26) |
| Conservation area designation (Q20) | No significant house price capitalization effects inside newly designated conservation areas (R31) |
| Conservation area designation (Q20) | Positive price effect outside conservation areas (Q26) |