Price based policies for managing residential development: Impacts on water quality

Land plays a critical role in determining the health of an urban ecosystem. One of its key roles is regulation of nutrient delivery. In this paper, we combine results from an instrumental variable duration model with a water quality model in a series of land use simulations to examine the impact that several hypothetical land use policies have in limiting nutrient delivery in an urban setting. Our results reveal tradeoffs between objectives for managing urban growth and those for managing water quality. A uniform tax on development reduces developed acreage but increases nutrient delivery. An environmental policy designed to retain forest cover is the most effective at mitigating water quality impacts, albeit with the lowest reduction of acreage developed.