CEPR & VideoVox Economics 7d ago

The Structural Transformation and Economic Growth (STEG) programme is hosting the 2026 STEG Annual Special Lecture as part of its research initiative to better understand structural change, productivity, and growth in low- and middle-income countries.   STEG welcomes Professor Chang Tai Hsieh (The University of Chicago Booth School of Business) to present Zoning: Misallocation or Externalities? Abstract:  We study how residential-commercial zoning affects the allocation of urban space. Using parcel-level data from Taipei and 36 U.S. metropolitan areas, we infer neighborhood-level zoning wedges from the allocation of residents, workers, and floor space. We find substantially greater dispersion in these wedges in U.S. cities than in Taipei, where mixed-use development is pervasive. The inferred wedges increase neighborhood specialization and reduce welfare. We then evaluate whether zoning is aligned with the neighborhood characteristics that would justify intervention. Although zoning is systematically related to comparative advantage, comparative advantage explains only a small fraction of the variation in zoning. The dominant effect of zoning in American cities is therefore not to promote efficient land use, but to increase the segregation of residential and commercial activity across neighborhoods. This lecture will be chaired by Professor Doug Gollin (Tufts University, Oxford University, and CEPR).