Information about land heterogeneity and delegation of land policy

This paper studies the effects of land heterogeneity on the private costs and social benefits associated with the regulation of a spatial externality. Land regulation consists in targeting some land units and remove the private sector from them to increase the quality of the environment. Land regulation is analyzed under two separate criteria: the information available and the delegation structure, i.e., the nature of its objectives (acreages, costs or benefits). It appears that a small number of conditions on the heterogeneity parameters are sufficient to deduct the best regulatory choices. A partial information about land heterogeneity does not always have a positive economic value. The overall efficiency associated with the use of information is in general invariant with the nature of the regulator's objectives.