Effects of Environmental Zoning on Household Sorting: Empirical Evidence and Ecological Implications

In this paper we present a preliminary analysis of whether and how spatial variation in environmental attributes affects the residential sorting of households with heterogeneous preferences. An important implication of such sorting arises if variation in preferences over environmental attributes is correlated with household activities affecting the local ecosystem, such as the replacement of native vegetation with lawns, and the removal of course woody habitat from a lake. In this case the sorting process may engender differential evolution of local ecosystems (lakes) with the same initial ecological state. The model examined in the paper has the potential to statistically examine this issue, and therefore holds promise for understanding the behavioral implications of land use policies designed to protect local ecosystems. By facilitating the grouping of different types of households onto different lakes, for instance, lakeshore zoning policies may engender differentiation in the ecological evolution of lakes beyond what would be expected from the zoning policies themselves.